The failure of the Canadian government to fulfill its commitments has prompted Stellantis and LG Energy Solution to take immediate action, according to a statement released by a Stellantis.
Prime Minister Justin Trudeau's administration had previously pledged financial assistance to bolster the competitiveness of Canadian manufacturing plants in comparison to their American counterparts following the passage of the Inflation Reduction Act last summer. As part of this effort, a substantial financial package of up to C$13 billion ($9.6 billion) was offered to Volkswagen AG for the establishment of a battery plant in southern Ontario, close to Detroit. Stellantis and LG Energy Solution made their announcement regarding the Windsor facility months before President Joe Biden signed the recent bill, which includes lucrative incentives for specific manufacturing sectors, including electric vehicles.
Negotiations between the Canadian government and Stellantis-LG are ongoing, as confirmed by an official in Canadian Industry Minister François-Philippe Champagne's office. However, with the current delay in meeting the agreed-upon terms, both companies have taken proactive measures to protect their interests by enacting alternative plans. Although specific details were not disclosed in the statement, it is evident that Stellantis and LG Energy Solution are actively exploring other possibilities to ensure the success of their battery production ambitions.
As the discussions between Stellantis-LG and the Canadian government continue, the outcome will have far-reaching implications for the future of electric vehicle battery manufacturing in the region. The stakes are high, and both parties are keen to reach a mutually beneficial resolution that upholds their respective interests while advancing the shared goal of promoting sustainable transportation through cutting-edge battery technologies.
Source: Bloomberg