Automaker Stellantis and South Korean battery-maker LG Energy Solution will build a large-scale electric vehicle battery plant in Windsor, Ont., a "game-changing" announcement federal and provincial leaders said positions Ontario to build the cars of the future from start to finish.
The more than $5-billion investment, announced Wednesday, is the largest in Canadian automotive manufacturing history, said federal Industry Minister François-Philippe Champagne.
"When I look at the announcement today, I think it's a great example of how you can create an economy that's going to be growing, but also that we would be in the economy of the 21st century, a greener economy," he said.
"Thanks to our many competitive advantages – I can think of the proximity to market, proximity to resources, proximity to the assembly line – we are well positioned to attract this investment."
The battery facility will supply Stellantis plants in North America and will employ about 2,500 people. Auto parts makers expect the total impact to be about 10,000 jobs. Construction is set to start this year, with a goal of being fully operational by 2025.
Ontario Premier Doug Ford touted the investment as part of his auto strategy to establish Ontario as a leader in each step of the electric vehicle manufacturing process, from the critical minerals needed for the batteries to assembly.
"This game-changing battery plant will help guarantee that Ontario is at the forefront of the electric-vehicle revolution," Ford said. "The cars of the future will be built in Ontario from start to finish because we made a promise to support our auto sector."
The federal and provincial governments are investing "hundreds of millions of dollars" in the plant, Ford said, but he wouldn't divulge the exact amounts as he said it would compromise negotiations with other companies.
Flavio Volpe, president of the Automotive Parts Manufacturers' Association, said the battery plant represents about 2 1/2 times the investment that is put into an assembly plant.
"It is in the product class that we think will define the haves and the have-nots in automotive in the decades to come," he said.
Volpe said it may also help secure the future of the Stellantis plant in Brampton, Ont., which currently builds the Chrysler 300, Dodge Charger and Dodge Challenger.
"LG would not have made this deal with Stellantis if Stellantis wasn’t promising them the business from their two assembly plants here," he said.
Some hybrid vehicles are produced in Ontario, including the Chrysler Pacifica plug-in hybrid minivan, and electric vehicles are set to start rolling off assembly lines at the end of this year, starting with electric commercial vans made by GM's CAMI assembly plant in Ingersoll, Ont. Ford is retooling its Oakville plant into a hub for battery-electric vehicle production, and Stellantis is retooling its Windsor facility for electric vehicles.
Ford's "Driving Prosperity" auto strategy released last year aims to build at least 400,000 electric vehicles and hybrids in the province by 2030 and establish a battery production facility, seemingly a far cry from the actions of the premier of 2018.
Shortly after he was elected, Ford scrapped electric vehicle rebates, stopped building provincially funded charging stations, and dropped a requirement for new homes to include wiring for potential EV chargers.
Ford is still resistant to the idea of rebates, but his government on Tuesday announced for the first time that it would put provincial money toward a network of public EV charging stations, to the tune of $91 million.
On the production side, he has announced a critical minerals strategy, seeking to attract more development and investment in the northern regions home to the materials used in smartphones, solar panels and electric vehicle batteries, and connect it to manufacturing in the south.
The province is also giving $500 million in loans and grants to a $1.8-billion ArcelorMittal Dofasco project to make its steelmaking process greener, with Ford calling clean steel a "critical ingredient" in electric vehicle production.
The three Ontario opposition parties said the battery plant is good news, but the government should bring back incentives to help drivers to make the switch to electric.
Joanna Kyriazis with Clean Energy Canada said the demand from consumers is strong, particularly in light of soaring gas prices, but buyers are waiting 12 to 18 months before they can drive their new electric vehicle home.
"We've really got to focus on the supply side and that's not only supporting auto manufacturers to build EVs, but also putting in place policies that ensure automakers are prioritizing the Canadian market," she said.
"Right now a lot of the EVS that are produced in the world are going towards the EU and the Chinese market, because there are policies in place that require this, the sale of EVs and cleaner cars in those places."
The federal government hopes to enact a mandate by the end of this year that half of all new passenger cars sold in Canada be zero-emission vehicles by 2030, reaching 100 per cent by 2035.
Stellantis and LG Energy Solution said they expect the Windsor battery plant to serve as a "catalyst" to establish a strong supply chain in the region.
"Our joint venture with LG Energy Solution is yet another stepping stone to achieving our aggressive electrification road map 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,” Stellantis CEO Carlos Tavares said in a statement.
This report by The Canadian Press was first published March 23, 2022.
Allison Jones, The Canadian Press