Stellantis & LG boost Canadian EV sector with gigafactory deal
As the race to increase domestic production of EVs heats up, Stellantis and LG Energy Solution are set to build a CA$ 5 billion (€3.62 billion) lithium-ion battery gigafactory in Canada.
Set to be located in Windsor, Ontario, the plant could stand to handle a significant amount of the automaker's output in North America when it opens in 2024, integrated into the nation's largest automotive manufacturing cluster.
Read more: Volkswagen low-carbon steel deal could make EVs greener
Construction on the plant is scheduled to start this year with the factory reportedly having the facilities to support 2,500 new jobs once it is up and running.
When complete, it could be the largest factory of its type in Canada, with an estimated annual output of 45 gigawatt-hours - enough for tens of thousands of EVs per year.
Increasing domestic supply of batteries could come in handy as the automaker is looking to ensure 100% of its car sales in Europe are battery-electric by 2030, alongside 50% of its car and small truck sales in the US and Canada. It has set itself the ambitious target of selling five million EVs per year by the end of the decade, a target well above those of its peers.
As part of its Dare Forward plan, it is also looking to operate at net-zero emissions by 2030.
“This marks yet another stepping stone to achieving our aggressive electrification roadmap in the region aimed at hitting 50% of battery electric vehicle sales in the US and Canada by the end of the decade,” Stellantis CEO Carlos Tavares said in a statement.
Tavares hopes the plant could act as the catalyst for a strong battery ecosystem as automakers look to shift away from primarily East Asian chip suppliers as the pandemic continues to throttle supply chains and car production.
The project has seen overwhelming support from the Canadian authorities with each of the Municipal, Provincial and Federal levels of the Canadian government having given it the green light.
Stellantis is currently one of Windsor's largest employers and has been since its parent Chrysler, which merged with PSA to form Stellantis in 2021, set up shop there in 1925.
It is located in the same urban area as the US city of Detroit, which is located across the river from Windsor. Detroit is often considered the hub for automotive production in the US, and at one point produced as much as one-third of its cars. Stellantis is also a major player in Detroit's scene.
Canada's Prime Minister Justin Trudeau described the plant as "an investment in our workers, our communities and our future" suggesting that projects such as this are vital in it "cleaning up" its economy.
Trudeau has looked to increase EV production in Canada for a while, with bolstering the sector being a campaign pledge during the 2021 snap election in which he won with a minority government.
It also formed a core part of his talks with US President Joe Biden in November 2021. Biden is also looking to increase the adoption of battery-electric vehicles, vowing to make 50% of US cars electric by 2030.
"By working together, we are creating thousands of new jobs, making a difference in the lives of people now and making sure that future generations have a clean environment to live in," Trudeau added.
The plant will be joined by four other major plants in other countries as the automaker looks to more than double its battery capacity from 140 GWh to 400 GWh.
LG hopes the investment will cement its place as a "key player" in local green energy supply chains. It currently supplies around 200 GWh of batteries per year.
“Creating a joint venture battery manufacturing company in Canada, recognised as one of the leading nations in renewable energy resources, is key for LG Energy Solution as we aim to power more electric vehicles around the world,” LG Energy Solution's CEO Youngsoo Kwon said in a statement.
Meanwhile, Ontario Premier Doug Ford hopes the investment in local automotive production can turn Ontario into a "hub for building the cars and batteries of the future."
Read more: Ford unveils 7 new EVs by 2026, pledges net-zero in Europe
"As we secure game-changing investments, 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. Every region of Ontario will benefit with thousands of jobs being created and a stronger economy that works for everyone,” he added.
The final details on the project are awaiting regulatory approvals.
Back to Homepage
Back to Transportation