Stellantis has all the information it needs to make a decision on Windsor, Ont. mfg. plant: Champagne
Champagne would give no details on the size of the offer except to point out his government's repeated promise to respond as needed to the massive subsidies created in the United States under the Inflation Reduction Act.
The federal government has delivered a written offer to Stellantis and LG Energy Solutions, Industry Minister Francois-Philippe Champagne said on Jun. 6.
Champagne said that should be all the companies need to make a decision on the fate of their planned electric vehicle battery plant in Windsor, Ont.
The minister said the negotiations are progressing, and “I think we’re getting to the end of it.”
He would not say if this was a final offer, but he did say he expects an answer from Stellantis soon.
“You know, they have what they need, and therefore I think that should be very short now,” he said.
A spokeswoman for Stellantis confirmed the offer had been received but would say no more beyond the fact it is “currently under financial and legal review.”
Champagne would give no details on the size of the offer except to point out his government’s repeated promise to respond as needed to the massive subsidies created in the United States under the Inflation Reduction Act.
“There should be no surprise,” he said. “I mean, we said that in the fall economic statement, we would be levelling the playing field with the United States when it comes to the IRA.”
He added that these are “generational opportunities.”
“These large manufacturing facilities, most of them will be decided within the next six to twelve months in North America. So therefore, either you win now, or you’re out of that industry for 50 years or until there’s a new technology.”
Canada and Ontario’s deal with Volkswagen to build a battery plant in St. Thomas, Ont., is worth $1.2 billion in capital and up to $13 billion in production subsidies through to 2033.
The Stellantis plant is half the size, but is set to begin making batteries three years earlier, so it could get even more in subsidies.
Prime Minister Justin Trudeau characterized the offer as a prudent one in order to ensure that Canada is part of the transition to a net-zero economy.
“It’s an offer that is both respectful of the taxpayer dollars that are going into it, but mostly it’s one that is reasonable to create great jobs for the future, for generations to come,” he said before the Liberals’ weekly cabinet meeting in Ottawa.
All of this is because of the Inflation Reduction Act in the United States, which last August put forward enormous production tax credits for advanced manufacturing including EV batteries.
The tax credits are so generous they will cut the cost of producing a battery in half, and companies have made clear to Canada that it must match the IRA or be left out.
Those includes Stellantis and LG Energy Solutions, which announced in March 2022 that they would be building a 45 gigawatt electric vehicle battery plant in Windsor, aiming for the first batteries to come off the line in early 2024.
Canada and Ontario each agreed to provide $500 million toward the $5 billion capital price tag. But as a result of the IRA, the two companies asked to renegotiate their deal and Canada agreed.
