Stellantis, LG Energy pick Windsor, Ont., region for EV battery plant, sources say

Stellantis and LG Energy Solution will build their new battery plant in Ontario, a person familiar with the matter told Bloomberg News. 

Automotive News Canada has since learned from sources with knowledge of the announcement that the two companies have decided on Windsor-Essex County as home of the plant. 

Automotive News Canada has also confirmed the investment is worth approximately $4 billion, as first reported by the Windsor Star.

Stellantis assembles the Chrysler Pacifica, Chrysler Pacifica Hybrid, Chrysler Grand Caravan and Chrysler Voyager at its Windsor Assembly Plant in Windsor, Ont.

An official announcement will likely happen on March 23, several sources have said.

Stephen MacKenzie, CEO of Invest WindsorEssex, confirmed in late February 2021 that the region was in hot pursuit of an unnamed battery maker. He later told Automotive News Canada in May 2021 the company had asked for a media blackout. Mackenzie on Friday again declined to comment.

Officials at Stellantis Canada and Unifor Local 444, which represents workers at Windsor Assembly Plant, weren’t immediately available for comment.

The Canadian government’s incentives for clean-energy businesses helped lure the companies, the person said, asking not to be identified because the decision isn’t public.

Stellantis and LG Energy said in October they were planning a battery-cell making factory in North America, as Stellantis, whose brands include Jeep and Ram, expands its electric vehicle lineup with a goal of raising U.S. EV sales to 40 per cent of deliveries by the end of the decade. The pair said construction of the plant is due to begin next quarter, with production slated to kick off in early 2024.

A spokesperson for LG Energy said there wasn’t any information to share as yet. Representatives for Stellantis and the Canadian embassy in Seoul didn’t immediately respond to requests for comment.

When asked for comment, Vic Fedeli, Ontario’s Minister of Economic Development, Job Creation and Trade, said he “is confident the province will land at least one EV battery manufacturing plant before the election in June.”

Ontario’s next provincial election is expected to be held on or before June 2, 2022.  

Stellantis CEO Carlos Tavares said back in July 2021 the automaker was considering Canada as home to one of two battery plants the company has planned in North America.

Tavares put Canada in the running during a fireside chat at an Automotive Press Association event in Detroit. Tavares initially said a decision would be made by the end of 2021.

Brendan Sweeney, managing director of the Trillium Network for Advanced Manufacturing, said each powertrain facility supplies up to six assembly plants.

Locating a battery plant in the Windsor area makes sense because of its proximity to Stellantis' assembly factory in Brampton, the U.S. Midwest as well as the automaker's headquarters in Auburn, Hills Mich.

"You wouldn't want to put it in a far-flung corner of the supply chain," he said. "You'd want it in the middle."

 Powertrain modules, Sweeney added, are high-valued added products, whose plants are significant contributors to a region's gross domestic product. 

A battery plant is critical to jump-starting Canada's electric-vehicle supply chain, he said.

"This is what we've been waiting for."

There have been a rash of tie-ups and arrangements between automakers and battery manufacturers in recent months as the world hurtles toward a clean energy future. Transitioning to electric cars is a key plank of that.

South Korean rival Samsung SDI Co. signed a memorandum of understanding with Stellantis in October to construct a plant in the U.S. that should have an annual output of around 23 gigawatt hours by the first half of 2025, while Panasonic Corp. is engaged in talks over the site for a new U.S. factory that would supply Tesla Inc. and potentially other EV manufacturers.

In September, Ford Motor Co. and Korea’s SK Innovation Co. announced plans to spend $11.4 billion constructing an assembly plant and three battery factories in Tennessee and Kentucky.

Greg Layson and Grace Macaluso of Automotive News Canada contributed to this report.