Stellantis halts construction of its battery factory in Canada, accusing Ottawa of failing to meet its commitments


Stellantis Bloodshot. The automaker led by Carlos Tavarès announced on Monday, May 15, to immediately end the well-advanced construction of its electric vehicle battery plant in Windsor, Ontario (Canada).

“To date, the Canadian government has not respected what was agreed. Therefore, Stellantis and LG Energy Solution will start implementing their contingency plans. Effective immediately, all construction related to battery module production at the Windsor site has ceased. » A scathing press release, which puts the responsibility for the work stoppage on the Liberal government of Justin Trudeau.

In March 2022, Stellantis – which notably houses the Chrysler and Fiat brands – and the South Korean battery manufacturer LG Energy Solution announced a major investment of 5 billion Canadian dollars (3.4 billion euros) to build this factory. known as Next Star Energy. At stake is the promise to create 2,500 jobs locally in this promising sector, in the “corridor” of the North American automotive industry, the city of Windsor being located four kilometers from Detroit (Michighan) in the United States.

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All levels of Canadian government – ​​provincial and federal – were to provide financial support. At the time, the total amount of aid promised by the public authorities had not been disclosed. But in any event, it was subsidies for the construction of the plant, of the order of 500 million Canadian dollars for each level of government.

Conversely, the federal Prime Minister, Justin Trudeau, and the leaders of Volskwagen made public, on April 21, the details of the agreement which allowed Canada to win, under the beard of the United States, a contract which provides for the construction of a “mega-factory” of batteries for electric vehicles in the same province of Ontario.

Compete with the generous American anti-inflation plan

Ottawa has in fact undertaken to pay, in addition to the 700 million Canadian dollars intended for the construction itself, production subsidies which could reach 13.2 billion Canadian dollars over ten years. An unprecedented record financing, intended to directly compete with the incentives allowed by the American law on the reduction of inflation – the Inflation Reduction Act (IRA) – of President Joe Biden, by granting Volkswagen, to the nearest dollar, the same credits that the manufacturer could have received by setting up on the other side of the border.

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