Had Been Hampered, Stellantis Again Continuing Factory Development In Canada

Jeep EV (Doc. Stellantis)

JAKARTA - Stellantis, a multinational automotive company, officially launched the construction of an electric vehicle battery factory in Windsor, Ontario, Canada, in collaboration with LG Energy Solution. Stellantis and LG formed a joint venture called NextStar Energy.

On July 5, they signed an agreement with the federal government to start production of cells and battery modules at the plant.

According to a report from Canadian Automotive News published on InsideEVs, the construction of this vehicle battery factory is worth US$3.7 billion or around Rp55.6 trillion. The development also received significant incentives from the Canadian federal government and the Ontario provincial government.

As part of the agreement, the Canadian government pledged to equalize the terms to the Inflation Reduction Act (IRA) in the United States. Stellantis hopes the Canadian government can meet these requirements.

"This cooperation allows the settlement of the deal, and we can now resume construction at the location in Windsor," said Stellantis North America Chief Operating Officer Mark Stewart.

Earlier, in May, Stellantis and LG had stopped building an EV battery factory planned in Canada due to government disapproval of the incentives offered.

By adjusting requirements such as IRA in the US, Stellantis hopes to gain more subsidies to support the production of cells and battery modules.

Luckily, Stellantis did not need to take the emergency step because they had received funds for the construction of the EV battery factory. On June 2, the Canadian government also offered a financial aid package, which is being reviewed by the joint venture for a month.

Although details of the offer have not yet been released, it is known that the Ontario government has pledged to pay up to a third of the total aid package worth US$3.7 billion.

Construction of the NextStar Energy plant in Windsor will resume, and production is scheduled to begin in 2024. The plant has a production capacity of more than 45 GWh per year, enough to supply batteries for more than 400,000 vehicles annually.

With the construction of this plant, this joint venture will create around 2,500 new jobs for the Windsor region and its surroundings.