LG Energy Solution and Stellantis’ joint venture, NextStar Energy, have reached a final agreement with the Canadian government regarding the conditions for battery production subsidies.
On the 6th, NextStar Energy announced, “We have final signed a contract that ensures a stable future for battery cell and module production in Ontario, Canada,” stating that “the Canadian government has promised subsidies equivalent to those under the U.S. Inflation Reduction Act (IRA).”
LG Energy Solution and Stellantis have decided to immediately resume the construction of the battery module factory, which was halted on May 15. This factory, being established in Windsor, Ontario, is planned to have an annual production capacity of 45 GWh and is expected to start operations in 2024. The two companies anticipate that the factory will create approximately 2,500 new jobs.
Kim Dong-myung, head of the automotive battery division at LG Energy Solution, expressed, “This is a meaningful decision for LG Energy Solution, Stellantis, and the Canadian government alike. We are thrilled to resume the construction of a new factory that is set to become a key base in North America’s electric vehicle and battery market.”
He also expressed his deep gratitude for the support of the South Korean government, as well as the efforts of officials from the Canadian government during the negotiation process.
Mark Stewart, COO of Stellantis North America, stated, “The U.S. IRA has completely changed the battery production landscape in North America, and without similar support, competitive battery production in Canada would be difficult.” He thanked the Canadian federal and provincial governments, as well as the largest Canadian labor union, Unifor, and confirmed that the construction of the factory would resume immediately.
Lee Hoon-sung, CEO of NextStar Energy, remarked, “NextStar Energy is one of the eight production plants of LG Energy Solution anticipated to grow significantly in North America. We will produce high-quality batteries in Windsor, Canada, and will continue to grow steadily alongside the local community.”
Meanwhile, LG Energy Solution expressed special gratitude for the successful agreement, stating, “We deeply appreciate the proactive response of the Canadian government and the all-encompassing support from the South Korean government that allowed our positions with Stellantis to be clearly conveyed.”
Previously, during the Korea-Canada summit celebrating the 60th anniversary of diplomatic relations held in May, President Yoon Suk-yeol and Prime Minister Justin Trudeau pledged to strengthen cooperation for sustainable growth and prosperity, promising close collaboration through the first high-level economic security dialogue between the foreign and industry ministers.
Yoo Sang-jin daedusj@autodiary.kr