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Canada’s $11B EV Boost: Battery Plant Deal Ignites Clean Energy Surge

  • Canada and Stellantis strike deal: EV battery plant to boost clean energy.
  • Substantial incentives: Billions of dollars to create jobs and strengthen the clean economy.
  • Temporary suspension resolved: Construction of the Windsor plant to resume.
  • Expansion plans: Volkswagen was also lured with incentives for EV battery manufacturing.
  • Driving sustainable growth: Canada aims to become a leader in the electric vehicle industry.

Canada and automaker Stellantis have reached an agreement to construct an electric vehicle (EV) battery plant in Ontario. The plant, located in Windsor, Ontario, will receive substantial financial incentives to boost Canada’s clean-energy supply chain and create numerous job opportunities. Initially, the project was halted due to subsidy concerns, but it has now resumed construction.

The joint venture, valued at $3.8 billion (CAD), aims to produce EV batteries for a significant portion of the North American market. The Canadian government hails it as the country’s largest-ever investment in the automotive sector, emphasizing its commitment to automotive sustainability.

In a recent announcement, the Ontario and Canadian governments finalized a deal that includes performance incentives worth up to $11 billion (CAD) for Stellantis. These incentives are intended to safeguard and create high-paying jobs, including unionized positions while strengthening the clean economy through the establishment of an end-to-end electric vehicle supply chain.

The agreement extends beyond Stellantis, as Canada and Ontario have also included a major Volkswagen EV battery cell manufacturing plant in St. Thomas, located about 190 kilometers (118 miles) east of Windsor. Europe’s largest carmaker stands to receive up to $9.7 billion (CAD) in incentives. This expansion highlights Canada’s efforts to attract investments in the electric vehicle sector, taking advantage of its abundant mineral resources like lithium, nickel, and cobalt.

Canada’s push to develop its electric vehicle industry aligns with the United States’ approach, which provides substantial subsidies for green industries through the Inflation Reduction Act. The performance incentives offered to Stellantis and Volkswagen are contingent upon battery production and sales from each project. They can be adjusted or reduced if the subsidies under the US Inflation Reduction Act undergo changes.

Stellantis has expressed its readiness to resume construction immediately, and battery production is scheduled to commence in 2024. Mark Stewart, Stellantis’s Chief Operating Officer for North America, commended the collective effort that facilitated the agreement and emphasized the importance of collaboration in driving progress.

The Windsor plant’s location, adjacent to Detroit, Michigan, solidifies its significance in promoting regional automotive sustainability and positioning Canada as a leader in the electric vehicle industry. The partnership between Canada, Ontario, and these major automakers serves to propel the growth of clean energy and reinforce the country’s commitment to a greener future.