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In an agreement with governments, Stellantis will pick up development of battery plants in Canada

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On Wednesday, the federal government of Canada and the province of Ontario signed a new agreement with Stellantis-LG Energy Solution (LGES), raising state subsidies for the development of an EV battery plant in the city of Windsor.

With production slated to begin in 2024 and the creation of over 2,500 new employment, the NextStar Energy battery plant in Windsor will resume construction, according to a press release. It intends to have an annual production capacity of over 45 gigawatt hours. In May, Stellantis halted development on the C$5 billion ($3.7 billion) EV battery plant in Windsor, Ontario, across the Detroit River, claiming that Canada was not providing the promised financial support.

When the United States approved the Inflation Reduction Act (IRA), which includes a significant package of incentives for businesses to use clean technology, in August of last year, tensions started to rise after Stellantis and LGES revealed their investment in a battery factory.”We are pleased that the Federal government with the support of the Provincial government came back and met their commitment of levelling the playing field with the IRA,” Mark Stewart, Chief Operating Officer for North America at Stellantis, said on Wednesday.

In order to entice German carmaker Volkswagen AG to locate its North American battery facility in the country, Canada agreed to offer up to C$13 billion in manufacturing tax credits and a C$700 million grant in April. The chain of suppliers for electric vehicles in Canada received the largest single investment ever.As the globe works to reduce carbon emissions, Canada, which has a sizable mining industry for minerals like lithium, nickel, and cobalt, is attempting to court businesses involved at all points in the supply chain for electric vehicles.

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