Automaker Stellantis (STLA) and battery maker LG Energy Solution have stopped construction on an electric vehicle battery plant in Windsor, Ontario amid claims that Canada’s federal government has not met its commitments to the project.
Specifically, Stellantis told Bloomberg News that: “The Canadian government has not delivered on what was agreed to… Effective immediately, all construction related to the battery module production on the Windsor site has stopped.”
The exact nature of the dispute between the federal government and companies is not clear.
The plant was announced in March 2022 with a total investment of about $5 billion by Stellantis and LG Energy Solution.
At the time the electric vehicle battery plant was announced, the Government of Ontario called it the largest automotive investment in the province’s history.
The Windsor battery plant was expected to be operational by 2025 and create 2,500 jobs in and around the southern Ontario city.
Windsor Mayor Drew Dilkens has confirmed that the battery plant is now in question and agreed that the federal government in Ottawa has not met its commitments to the project.
In a Twitter post, Dilkens called on federal officials to “follow through” and get the battery plant back on track.
Industry Canada has said the federal government is in talks with Stellantis concerning the battery plant.
It is not known publicly how much money the federal government offered to Stellantis regarding construction of the Windsor battery plant.
Ontario Premier Doug Ford says his government has committed financial support of $500 million towards the plant’s completion.
Ottawa recently offered federal subsidies worth up to $13 billion on top of a $700 million grant to secure a new Volkswagen battery plant in St. Thomas, Ontario.
The president of the union representing about 8,000 Stellantis workers in Canada has said that time is running out for Ottawa to complete negotiations with the company and save the Windsor battery plant.
Shares of Stellantis have risen 13% in the last 12 months to trade at $16.10 U.S.
