Stellantis has yet to resume construction of the battery module portion of its $5-billion electric-vehicle battery plant in Windsor, Ont., even though Premier Doug Ford has pledged an undisclosed amount of additional financial support for the project.
The automaker and its partner LG Energy Solution stopped construction of the NextStar Energy plant May 15, alleging the federal government wasn’t holding up its end of a deal potentially worth billions in incentives.
Financial terms between the two have never been disclosed, but Stellantis accused the federal government of not living up to promises to match incentives contained in the U.S. Inflation Reduction Act (IRA). The U.S. legislation includes an incentive of US $35 per kWh of cell production and a US $10 per kWh incentive for battery module production.
The automaker warned it is making contingency plans – a sign that it was willing to move the project across the border.
In a letter dated April 19, the heads of Stellantis and LG Energy Solution told Prime Minister Justin Trudeau the project was in jeopardy if he did not honour what the company says was a promise in writing to close the “competitive gap posed by the U.S. legislation,” according to a report in the Toronto Star newspaper.
The letter, signed by Stellantis CEO Carlos Tavares and LG Energy Solution CEO Young Soo Kwon, asked the prime minister to “urgently” sign off on an agreement reached at the end of February to match U.S. production subsidies for green energy and manufacturing projects offered by the Biden administration.
The federal government promptly shifted blame to the Ontario government, asking it to pay “their fare share,” without elaborating.