Stellantis Weighs Offer From Canada to Save Battery Plant

Construction Was Halted as Stellantis, LG Sought Deal on Par With US Incentives
Downtown Windsor, Ontario
Downtown Windsor, Ontario, at the holiday season. Windsor is the site of a proposed electric vehicle battery plant. (Steven_Kriemadis/Getty Images)

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Stellantis NV and LG Energy Solution Ltd. are reviewing an offer from the Canadian and Ontario governments to salvage an electric vehicle battery plant in Windsor, across the border from Detroit.

The carmaker and its South Korean partner announced the $4.1 billion plant in 2022 but halted construction in May amid a dispute over subsidies. The companies are seeking public money on par with the incentives in the U.S. Inflation Reduction Act.

Ontario said last week it would pay one-third of the subsidy for the companies. The overall amount is likely to be more than the C$13 billion ($9.7 billion) Canada offered to Volkswagen AG for a similar project. Although the Volkswagen plant is larger, the Stellantis factory is set to begin production sooner and would benefit from the fact that the Inflation Reduction Act offers production subsidies that phase out starting in 2030 and end entirely in 2033.

Stellantis spokeswoman LouAnn Gosselin said in a statement June 6 that the companies are in receipt of a written offer that is currently under financial and legal review.

Prime Minister Justin Trudeau confirmed to reporters that an offer is on the table.

“It’s an offer that is both respectful of the taxpayer dollars that are going into it, but mostly it’s one that is reasonable to create great jobs for the future, for generations to come, to secure a future in communities across southern Ontario and to ensure that Canada is fully contributing to the net-zero world,” he said.

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