Automaker says feds aren’t holding up their end
Stoppage comes just weeks after VW battery plant announcement
Stellantis has pressed pause on its massive EV battery module plant in Windsor, ON, and boy howdy is it ever complicated. The automaker is reportedly saying that the feds haven’t delivered on promises, while other sources say that the automaker wants a deal more like the one Volkswagen got.
“As of today, the Canadian Government has not delivered on what was agreed to therefore Stellantis and LG Energy Solution will begin implementing their contingency plans. Effective immediately, all construction related to the battery module production on the Windsor site has stopped,” Stellantis told Automotive News in a statement yesterday.
The $5B plant in Windsor was announced last year. The site is set to produce 45 gigawatt-hours of battery cells for EVs expected to be built in the Windsor area as well as in Michigan. The construction stoppage applies to the module part of the facility, where battery cells are assembled into packs. It does not yet appear to affect the cell construction portion of the plant.
After the plant was announced and construction started, the U.S. government passed the Inflation Reduction Act. A massive piece of legislation that included up to US$45 per kWh of battery manufacture per year to automakers building batteries in the U.S. For a plant the size of the Stellantis site, that’s around U.S. $2B per year through 2032.
It’s largely because of that bill that the feds agreed to the $13B in tax credits VW is reported to be getting for building its own battery plant in St. Thomas, ON. The Canadian government tried to match the U.S. in order to get the plant built here.
Last week, the Toronto Star reported that Stellantis had been looking for a better deal even before the VW announcement was made. The paper said that Minister Champagne confirmed “we’re still negotiating.”
Now both parties are involved in the high-stakes negotiations that could either see Stellantis getting a larger government assistance package or the automaker forced to follow through on its threat to restart on a battery production site that was set to go into production next year.
