Windsor, Ont., Mayor Drew Dilkens has a simple message for Prime Minister Justin Trudeau when it comes to the $5-billion NextStar Energy electric-vehicle battery plant:
"Get this project done."
Dilkens made the plea Monday while flanked by about 40 stakeholders, including officials from Unifor, Invest Windsor-Essex, city council and more.
Stellantis and LGES halted work on part of the 220-acre (88-hectare) NextStar Energy construction site May 12, saying that the Canadian government has “not delivered” on promises to match production credits offered in the U.S. Inflation Reduction Act (IRA).
The U.S. legislation, which was passed in Washington last summer, several months after the companies announced the $5-billion Windsor plant, offers tax credits of US $35 for each kWh of battery cells produced, plus $10 for each kWh of modules.
Stellantis has spent more than two weeks threatening to relocate module production if it didn’t receive more government money.
Dilkens claimed the “entire project is at risk.”
“Each passing day increases the likelihood we will not receive the commitments made,” he said.
“We cannot afford to be short-changed,” Dilkens said. “We have delivered on all our commitments and more.”
The city paid $53 million to acquire land for the factory.
Dilkens on Monday will bring forth a notice of motion to city council “urging the federal government to act swiftly in finalising the agreement.”
On May 26, Dilkens launched a petition on Change.org to save the federal funding.
“It is time for them to fulfil their end of the bargain,” Dilkens said of the federal government.
Unifor Local 444 President Dave Cassidy, who represents thousands of autoworkers in Windsor, took the podium after Dilkens and was quick to note “not all construction has stopped.”
Work continues on the cell-production portion of the factory.
Cassidy said he spoke with Mark Stewart, Stellantis' COO North America, on the weekend who told him that "we still have a little bit of time" to reach a resolution.
ORIGINAL PLAN 'LIKELY'
However, Stellantis isn’t likely to move the production of electric-vehicle battery modules to the United States from Windsor, maintains one automotive analyst.
Sam Fiorani, vice-president of global vehicle forecasting at U.S.-based AutoForecast Solutions, doubled down on his previous assertion that the automaker has little — if any — opportunity to move its planned facility, already under construction.
“It’s likely this will play out the way it was originally planned,” he once again told Automotive News Canada on May 26. “It’s potentially on the cusp of when they could change direction for the battery plant, but they’re cutting it really close.”
The battery facility is to serve as a hub for plants in North America, including assembly plants in Windsor and Brampton, Ont., both of which are slated to get electrified vehicles to build, according to AutoForecast Solutions.
However, the automaker has an idled plant in nearby Belvidere, Ill., and could shift product planned for Brampton south of the border.
“There is potential. They have an open plant. It’s very late in the game to turn this ship around,” Fiorani said. “If they had more time, they potentially could have got more money. At this point, they’re just playing on the fact other companies got money and they didn’t.”
Stellantis announced in May 2022 that its nearby Windsor Assembly Plant will be retooled starting later this year. Battery-electric vehicle production is scheduled to begin in 2024, Fiorani said, but will rely on cells and modules from the new battery plant.
Stellantis says retooling of that plant remains on schedule.
Stellantis is hoping to squeeze more cash from all levels of government in an effort to land a deal similar to the one Volkswagen received for a $7-billion battery plant it’s about to build in St. Thomas, Ont.
Ottawa recently pledged to match the IRA’s $35 cell credit as part of its successful bid to attract Volkswagen Group to St. Thomas, but that deal did not extend to modules, according to Innovation, Science and Economic Development Canada (ISED).
Talks with Stellantis about incentive funding have been ongoing since the introduction of the IRA, according to ISED, and the Volkswagen accord has only increased their urgency.