Stellantis to resume battery plant construction in Canada in deal with governments

FILE PHOTO: The logo of Stellantis is seen on a company's building in Velizy-Villacoublay near Paris, France, February 23, 2022. REUTERS/Gonzalo Fuentes/File Photo

(Reuters) -Canada's federal government and the province of Ontario on Wednesday inked a new deal with Stellantis-LG Energy Solution (LGES), increasing state subsidies for the construction of an electric-vehicle (EV) battery plant in the city of Windsor, Stellantis said.

Construction at the NextStar Energy battery plant in Windsor will resume with production set to launch in 2024, with the creation of some 2,500 new jobs and aims to have annual production capacity over 45 gigawatt hours, the release said. Stellantis had stopped construction on the C$5 billion ($3.7 billion) EV battery plant across the Detroit River in Windsor, Ontario, in May, saying Canada was not delivering on promised financial support.Stellantis and LGES announced their battery plant investment in March last year, but tensions emerged when the United States in August passed the Inflation Reduction Act (IRA), which includes a massive package of clean-tech incentives for companies.“We are pleased that the Federal government with the support of the Provincial government came back and met their commitment of leveling the playing field with the IRA," Stellantis Chief Operating Officer for North America Mark Stewart said on Wednesday. In April, Canada agreed to provide up to C$13 billion in manufacturing tax credits and a C$700 million grant to lure German automaker Volkswagen AG to build its North American battery plant in the country. It was the biggest single investment ever in Canada's electric-vehicle supply chain.Canada, home to a large mining sector for minerals including lithium, nickel and cobalt, is trying to woo companies involved in all levels of the EV supply chain via a multibillion-dollar green technology fund as the world seeks to cut carbon emissions.