Construction resumes on Stellantis battery module plant in Windsor after 7-week halt

Construction on the module manufacturing building of Stellantis NV's joint venture battery plant in Windsor, Ontario, is resuming immediately after NextStar Energy signed a binding agreement with the Canadian government that levels the incentives with the United States.

More than seven weeks ago, the joint venture between the maker of Chrysler, Dodge, Jeep, Ram and other vehicles and Korean battery maker LG Energy Solution halted production on the building after the automaker and its battery partner claimed Canada wasn't making good on its commitments to match manufacturing incentives to those of legislation known as the Inflation Reduction Act in the United States. Construction on the cell manufacturing part of the plant continued.

The plant will launch production in 2024. Canada didn't immediately share details of the incentives.

“The IRA fundamentally changed the landscape for battery production in North America, making it challenging to produce competitively priced, state-of-the-art batteries in Canada without an equivalent level of support from government,” Mark Stewart, Stellantis chief operating officer in North America, said in a statement. “We are pleased that the Federal government with the support of the Provincial government came back and met their commitment of leveling the playing field with the IRA."

Stellantis and LGES announced the $4.1 billion investment in the city across the Detroit River in March of last year. The plant will have more than 45 gigawatt hours of capacity and create 2,500 jobs. Canada committed roughly $375 million (500 Canadian dollars) to the project.

"This agreement is good for workers and it is good for Canada," said Chrystia Freeland, deputy prime minister and minister of finance, and François-Philippe Champagne, the minister of innovation, science and industry, in a statement. "It will create and secure thousands of jobs — both in the auto sector and in related industries across Canada — and will further solidify Canada’s place as a leader in the global electric vehicle supply chain. We look forward to sharing further details with Canadians.”

President Joe Biden in August signed the IRA into law. It offers tax credits up to $35 per kilowatt hour for the U.S. production of battery cells and an additional $10 per kilowatt hour for modules, which are made up of cells. Stellantis approached Canada following its passage and stopped production on May 15.

Canada, subsequently supported by the province of Ontario, agreed to pay up to $9.7 billion (13 billion Canadian dollars) in manufacturing tax credits and a $521 million (700 million Canadian dollars) grant to persuade Volkswagen AG to build a battery plant in St. Thomas, Ontario, valued at $14.9 billion (20 billion Canadian dollars).

To provide Stellantis the additional incentives, Prime Minister Justin Trudeau wanted Ontario to contribute to keep the plant in Windsor. Although Premier Doug Ford objected to the request originally because U.S. state governments don't contribute to the IRA's incentives, Ontario eventually agreed to support the attraction effort.

“Thanks to the agreement and continuous support from the Windsor community, NextStar Energy can now focus on what we do best,” NextStar Energy CEO Danies Lee said in a statement. “We will soon produce state-of-the-art batteries here in Windsor, and we’re excited to grow and thrive with the community.”

bnoble@detroitnews.com

Twitter: @BreanaCNoble