The federal and Ontario governments are expected to announce Wednesday that they are offering hundreds of millions of dollars to support the construction of a massive electric-vehicle battery plant in Windsor, Ont. – the latest and biggest move in a race to attract green jobs and transform the country’s automotive industry.
Global car giant Stellantis NV and South Korea’s LG Energy Solution are expected to unveil a $4-billion plan to create an electric-vehicle battery plant in Windsor that could create up to 3,000 jobs in the city, an industry source with knowledge of the long-anticipated deal confirmed to The Globe and Mail. The Globe is not identifying the source as they were not authorized to provide details publicly.
Brendan Sweeney, managing director of the non-profit Trillium Network for Advanced Manufacturing in London, Ont., said such a plant would be the largest single investment in Canada’s auto sector since the 1980s.
“This is the thing we’ve been waiting for,” Dr. Sweeney said. “If this is $4-billon, this is for real.”
Government officials would not reveal details about the plans on Tuesday.
In similar deals, the two governments have each pledged to cover up to 10 per cent to 20 per cent of the costs of this kind of new auto-sector investment – as part of a concerted campaign to attract electric-vehicle and battery plants and eventually spur the mining of the minerals needed to build the batteries in Canada as well. The batteries are expected to be in high demand as car makers dramatically ramp up their production of electric vehicles in the coming years.
The government of Premier Doug Ford has made its part of the push to attract electric-vehicle and EV battery plants a frequent talking point, with a spring election campaign looming in which Ontario’s record on climate change is expected to face harsh criticism from opposition candidates.
Mr. Ford and his Economic Development Minister, Vic Fedeli, will be on hand in Windsor on Wednesday for the battery plant announcement, along with federal Innovation, Science and Industry Minister François-Philippe Champagne, federal Transport Minister Omar Alghabra and Windsor Mayor Drew Dilkens.
In an e-mailed statement on Tuesday, Mr. Fedeli would say little about the deal but suggested even more electric-vehicle announcements were in the works.
“We’re confident that because of the ‘Open for Business’ climate we’ve created in Ontario, we will be successful in landing an EV battery facility, as well as more EV vehicle investments in the coming days and weeks,” Mr. Fedeli said.
Canada’s auto industry is getting massive investment despite the threat of a proposal from U.S. President Joe Biden, in his Build Back Better economic plan, which would offer incentives of up to US$12,500 to Americans for buying U.S.-made and union-made electric cars.
Mr. Ford and Mr. Fedeli were just in Washington on Monday, making their case against the idea, which is part of legislation that has stalled amid opposition on Capitol Hill, but if passed, could threaten Ontario’s plans to turn the province into an electric-vehicle manufacturing powerhouse.
Bloomberg News reported last week that Stellantis, created by a merger last year of Fiat Chrysler Automobiles and France’s Peugeot SA, and LG had chosen Ontario for the location of a new battery plant.
Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, would not share details of the battery announcement. He said while it follows several multibillion-dollar battery plants launched in the U.S., it’s a vote of confidence in Canada’s role in the rising electric-car industry.
“It’s absolutely transformational,” Mr. Volpe said, adding that landing this battery deal could lead to others.
He also said he believes the U.S. industry’s decision makers have been reassured that last month’s protest blockade of Windsor’s Ambassador Bridge, a key artery for the parts that flow to plants in both countries, was a one-off.
He added the big automakers clearly believe that the U.S. tax incentive, which he has been lobbying against, is not a deal breaker for investments in Canada. Even if it were to pass, he said, batteries made in Canada could still be shipped and put into U.S.-made cars, with only a small effect on the rebate a U.S. purchaser could expect.
Just last week, Mr. Ford and Prime Minister Justin Trudeau were in Alliston, Ont., announcing that each government was providing $131.6-million for upgrades at Honda Motor Co. Ltd.’s manufacturing plant, where Honda will eventually build its 2023 CR-V and CR-V Hybrid vehicles. Honda said the retooling project would cost $1.4-billion over six years.
General Motors Co. has also said it and South Korean company Posco Chemical Co. Ltd. were building a $500-million plant in Bécancour, Que., to produce cathode active material – a major component of electric-vehicle batteries that GM will assemble in the United States. Germany-based chemical multinational BASF has also announced that it has acquired industrial land in Bécancour to produce the material there as well.
In 2020, Ontario and the federal government put $295-million each toward a Ford Motor Co. of Canada Ltd. plan for a $1.8-billion global battery electric-vehicle production hub at its complex in Oakville, Ont.
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