[1/2] Canadian Prime Minister Justin Trudeau addresses the media during a tour of the Stellantis Windsor Assembly Plant in Windsor, Ontario, Canada. January 17, 2023. Portal/Rebecca Cook
OTTAWA, May 15 (Portal) – Automaker Stellantis (STLAM.MI) has halted construction of a more than CA$5 billion (US$3.7 billion) electric vehicle battery plant in Canada amid talks with the federal government over their support for the factory were introduced.
“Effective immediately, all construction work related to battery module production at the Windsor site has halted,” a spokesman said, adding that some construction work related to battery cell production is continuing.
Stellantis says the government has not honored what was agreed last year.
The move comes a month after Canada agreed to provide up to CA$13 billion in subsidies and a CA$700 million grant to persuade German automaker Volkswagen AG (VOWG_p.DE) to build its North American battery plant in the country.
Stellantis and South Korean company LG Energy Solution (373220.KS) (LGES) announced last year their investment in a battery plant in Canada, aiming for an annual production capacity of more than 45 gigawatt hours (GWh) and expected to create an estimated 2,500 new jobs can of the Windsor area.
The investment, which would also include contributions from federal and provincial governments, was the largest ever in Canada’s automotive sector at the time.
The federal government says it is in talks with Stellantis management and the issues may be resolved.
“I am absolutely confident that we will reach an agreement. But I also want to note that the federal government’s resources are not unlimited,” Treasury Secretary Chrystia Freeland told reporters, adding that the Ontario provincial government must do its “fair share.”
The Ontario provincial government says it has already signed a deal with the automaker and is not in negotiations.
“It worries me a lot,” Ontario Premier Doug Ford told reporters when asked about the halt to construction. “We need a commitment from the federal government like at Volkswagen.”
Volkswagen’s battery gigafactory is the largest single investment in Canada’s electric vehicle supply chain to date.
($1 = 1.3372 Canadian dollars)
Reporting by Ismail Shakil in Ottawa
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