Stellantis N.V. (NYSE: STLA) and LG Energy Solution will invest over $5 billion to build a large battery plant in Windsor, Ont., with an expected annual production capacity of over 45 gigawatt hours to produce lithium-ion battery cells.
Construction of the plant, which is expected to create 2,500 jobs, will begin later this year and the facility will be operational by 2025, Canada's ministry of industry said in a press release. The federal government's investment in the project is still being discussed, a ministry spokesperson said.
"We are seeing the largest investment in Canada's auto sector," Francois-Philippe Champagne, Minister of Innovation, Science and Industry said in a release. "We will continue... to attract other companies and encourage them to set up shop in Canada to help create jobs, generate economic benefits and contribute to a net-zero emission future."
Experts have urged the Canadian government to invest more to create a strong battery supply chain as demand for electric vehicles have increased with the world looking to meet its net-zero goals by 2050.
In early March, the Mining Association of Canada (MAC), which includes about 50 of the country's leading mining companies, urged the government to invest more in critical minerals - required to make EV batteries - ahead of the national budget to avoid "slipping behind" its competitors in the sector.
Economist Patricia Mohr, who was vice-president of Scotiabank and is now an independent analyst and founder of the publication Critical Metals for a Sustainable World, told The Northern Miner that the battery plant's expected production capacity is a lot more than several plants in the United States and Europe.
"There are many battery plants that produce about 25 gigawatt hours, but the one at Windsor is 45 and that's a large plant," said Mohr. "This is a very important step."
The sourcing plans for the battery plant are "still under development," a spokesperson from Stellantis told The Northern Miner.
"Our joint venture with LG Energy Solution is yet another steppingstone to achieving our aggressive electrification roadmap in the region aimed at hitting 50 per cent of battery electric vehicle sales in the U.S. and Canada by the end of the decade," said Carlos Tavares, CEO of Stellantis, created last year by a merger of Fiat Chrysler Automobiles and France's Peugeot SA.
Youngsoo Kwon, CEO of LG Energy Solution said that the plant was "critical" for the company's goal of powering "more EVs around the world." The company's global network spans across North America, Europe, Asia and Australia with a 23 percent share of the global EV battery market.
"Attracting this multi billion-dollar investment will secure Ontario's place as a North American hub for building the cars and batteries of the future," said Ontario Premier Doug Ford. "We're also connecting resources, industries and workers in northern Ontario with the manufacturing might of southern Ontario to build up home-grown supply chains."
Drew Dilkens, the mayor of Windsor said that Stellantis is the region's largest employer and has a "rich history" in the community.
"As the world pivots to EVs, Windsor will soon be home to the battery manufacturing facility that powers it all," said Dilkens in a press release.
Canada Prime Minister Justin Trudeau, in a press release, said "partnerships" like these were "critical to creating new jobs and putting Canada on the cutting edge of the clean economy."