[1/2] Canadian Prime Minister Justin Trudeau addresses the media during a tour of the Stellantis Windsor Assembly Plant in Windsor, Ontario, Canada. January 17, 2023. (Reuters) / Rebecca Cook
OTTAWA (Reuters) – Carmaker Stellantis (STLAM.MI) has halted construction on a more than C$5 billion ($3.7 billion) electric vehicle battery plant in Canada amid talks with the federal government over its support for the plant.
“Effective immediately, all construction work related to battery unit production at the Windsor site has ceased,” a company spokesperson said, adding that some construction related to battery cell production is continuing.
Stellantis says the government has not delivered on what was agreed last year.
The move comes a month after Canada agreed to provide up to C$13 billion in support and a C$700 million grant to attract German automaker Volkswagen (VOWG_p.DE) to build a North American battery plant in the country.
Stellantis and LG Energy Solution (373220.KS) (LGES) of South Korea announced their investment in a battery plant in Canada last year, aiming for an annual production capacity of more than 45 gigawatt-hours (GWh) and expected to create an estimated 2,500 new job opportunities in Canada. Windsor area.
The investment, to which the federal and provincial governments were also to be contributed, was the largest ever in the Canadian auto sector at the time.
The federal government says it is in talks with the Stellantis administration and the issues can be resolved.
“I’m absolutely confident we’ll get a deal. But I also want to point out that the federal government’s resources are not infinite,” Finance Minister Chrystia Freeland told reporters, adding that the Ontario provincial government should. “Its fair share.”
The Ontario provincial government says it has already signed a deal with the automaker and is not in negotiations.
“It really worries me,” Ontario Premier Doug Ford told reporters when asked about the construction halt. “We need the federal government to step up like it did with Volkswagen.”
The massive Volkswagen battery plant is the largest single investment ever in Canada’s electric vehicle supply chain.
($1 = 1.3372 Canadian dollars)
Reporting by Ismail Shakil in Ottawa
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