Stellantis and LG Energy Solution (LGES) announced the signing of binding and definitive agreements to develop Canada's first large-scale electric car battery production plant. The joint venture will manufacture advanced lithium-ion battery cells and modules to meet a significant portion of Stellantis' North American production requirements.
The joint venture will invest more than $5 CAD billion to commence operations, which will entail the construction of an entirely new battery facility in Windsor, Ontario. The plant's construction is anticipated to begin this year, with production in the first quarter of 2024.
The battery facility aims to produce more than 45 gigawatt-hours (GWh) per year and create an estimated 2,500 new employment in Windsor and the surrounding region. The Government of Canada has made regional and federal pledges to fully support the joint venture's success.
Stellantis and LGES hope that the new battery facility will function as a catalyst for the region's development of a robust battery supply chain. Windsor is home to the country's most significant cluster of car manufacturers. In addition, the government is dedicated to developing a solid and indigenous battery ecosystem, capitalizing on its expertise in renewable energy generation, among other things.
"Our joint venture with LG Energy Solution marks another significant step forward in our region's ambitious electrification goal. By the end of the decade, we want battery-electric vehicles to account for 50% of US and Canadian sales," Stellantis CEO Carlos Tavares stated. "We appreciate the support and dedication of all local, provincial, and federal decision-makers in establishing Canada as a premier North American EV battery manufacturer."
"Through this joint venture, LG Energy Solution can establish a leadership position in the region's green energy value chain," stated Youngsoo Kwon, LG Energy Solution's CEO. "Establishing a joint venture for battery production in Canada — a country renowned as a leader in renewable energy – is crucial for LG Energy Solution as we strive to power more electric vehicles globally."
"Today's announcement of a world-class manufacturing plant for electric car batteries in Windsor represents an investment in our people, communities, and future. These collaborations are crucial for creating new employment and establishing Canada as a leader in a sustainable economy. When we work together, we can generate thousands of new jobs, enhance people's lives, and safeguard a clean environment for future generations," said Justin Trudeau, Canada's Prime Minister.
"Stellantis is the largest employer in Windsor and has a long history in this town. In 1925, Chrysler established a manufacturing facility in this town, employing generations of Windsor-Essex residents. With this announcement, we are securing the futures of thousands of people and Windsor's key position as the center of Canadian electric car production. As the globe transitions to electric cars, Windsor will soon become the battery manufacturing that powers us," stated Drew Dilkens.
Stellantis has declared that as part of its "Dare Forward 2030" strategy plan, it would sell five million electric cars annually by 2030, accounting for 100% of the car sales mix in Europe and 50% of the car and light truck sales mix in North America. Stellantis is also expanding its anticipated battery capacity by 140 GWh to around 400 GWh, aided by acquiring five battery plants and supply contracts.
LG Energy Solution has secured a reliable manufacturing capacity of more than 200 GWh per year in North America, which is sufficient to create 2.5 million high-performance electric vehicles. In addition, the battery company has previously revealed plans to invest around 4.6 billion US dollars in North American battery factories. Globally, LGES is on pace to extend its worldwide production network to include nations such as Canada, the United States of America, Poland, Indonesia, China, and South Korea.
Customary closing conditions, including regulatory clearances, apply to the agreements.
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