South Korea’s LG Energy Solution (LGES) and Dutch car manufacturing group Stellantis resumed the construction of an electric vehicle (EV) battery plant in Canada. The Canadian federal government and provincial government of Ontario agreed to provide incentives of up to CA$15 billion (US$11 billion).
The agreement fixes a dispute, which we reported in May, which put construction of the $4 billion plant on hold. There were accusations that the Canadians failed to deliver what they promised when the deal was announced last year. LGES said the plant is due to launch in 2024 and have an annual production capacity in excess of 45 GWh.
The statement from the Ontario government said the agreement by the two governments extended to the project by Volkswagen Group and its subsidiary PowerCo to establish Volkswagen’s first overseas EV battery cell manufacturing plant in St. Thomas, Ontario. Volkswagen could receive up to CA$13 billion ($9.7 billion) in performance incentives, it said.
Conditions apply to the production and sale of batteries from each project, and link to incentives offered under the US Inflation Reduction Act.
“It’s a good day, not only for our joint venture, but also for Canada,” said Dong-Myung Kim, president and head of the advanced automotive battery division of LGES “We are happy to finally move forward with building the country’s first major battery plant and be a central part of the local battery ecosystem. We are grateful to the federal and provincial government for working together, and to everyone who worked tirelessly to get this deal done.”
