South Korea’s LG Energy Solution and Dutch car manufacturing group Stellantis stopped construction of a $4 billion electric vehicle (EV) battery plant in Ontario, Canada. Prime Minister Justin Trudeau flew out to Seoul ahead of the G7 summit in Japan to meet Korean President Yoon Suk Yeol and LG Energy executives to discuss the matter.
There is a dispute between Canada’s federal and provincial governments over financial aid to the facility.
Industry people said the Canadians have failed to deliver what they promised when the deal was announced last year. “Effective immediately, all construction related to the battery module production on the Windsor site has stopped,” a Stellantis spokesperson said.
Canada is competing with the US to attract battery makers and electric vehicle (EV) manufacturers and stands to lose heavily if the project does not go ahead. Windsor Mayor Drew Dilkens said the project is in question due to the federal government not meeting its commitments, “jeopardizing not only the completion of the EV plant but also our efforts to attract additional investment to the region,” reported Bloomberg.
In a letter published on Twitter, Dilkens said he expects the federal government to “follow through” and get the project back on track.
Battery cell production construction is carrying on as Canadian government officials try to resolve the matter with Stellantis and LG.
Last month, it was reported that the Canadian government agreed to pay C$13 billion ($9.7 billion) in a package of subsidies over a decade to get car manufacturer Volkswagen to build an EV battery plant in Toronto.
LG Energy and Stellantis announced their 45GWh battery plant investment in Ontario in March 2022. They will manufacture lithium-ion battery cells and modules to meet a significant portion of Stellantis’ vehicle production requirements. Investment is C$5 billion (US$4.1 billion).
Update 24 May 2023
Last week South Korea’s LG Energy solution and Dutch car manufacturing group Stellantis suspended construction of a $4B battery plant in Ontario following financial dispute between Canada’s federal and provincial governments over funding aid. Ontario initially refused to provide subsidies, stating this was up to federal government to provide, but has since reminded. Ontario Premier Doug Ford has now pledged extra money for the facility thus “Saving jobs and giving people the quality of life they deserve”.
The federal government has welcomed the move and stated that it is in talks with Stellantis and a solution will be forthcoming, according to KoreanEconomicDaily news outlet.