What’s included in the Stellantis EV battery plant deal?

The finalized deal to keep the NextStar electric vehicle battery plant in Windsor includes performance incentives of up to $15 billion, according to the province.

A news release from the Ontario government says Canada and Ontario established an “auto pact” to secure the plant.

“Today, our governments are pleased to announce that we have finalized an agreement with Stellantis-LG Energy Solutions (LGES) to create and secure thousands of good-paying auto jobs and tens of thousands of indirect jobs across Canada. As part of the agreement, Canada and Ontario will provide performance incentives to Stellantis-LGES of up to $15 billion, subject to conditions and benefits to Canada and Ontario,” according to a joint statement from Canada’s Finance Minister Chrystia Freeland, François-Philippe Champagne, minister of innovation, Premier Doug Ford, and Vic Fedeli, Ontario’s minister of economic development.

Negotiations had been stuck since mid-May and a portion of construction was stopped at the site on Banwell Road.

Effective immediately, all construction at the NextStar Energy battery plant in Windsor will resume with production operations planned to launch in 2024.

“Absolutely wonderful, great news,” said Unifor Local 444 President, Dave Cassidy. “This is a game changer. I mean, I'm not so sure everybody understands how big of a game changer this is.”

“I didn't have one doubt whatsoever. I mean, I know that Stellantis knows what they have here in Canada. They know the workforce they have. They know the quality vehicles that we put out, and they actually rely on us,” Cassidy added. “My father always told me as young man, stick and stay, it's bound to pay. And that's what we did because we knew how important this is for our community. People often say that Canada stops in London. Well, I have a different approach. Manufacturing in the auto industry starts right here in Windsor-Essex. It starts right here in Canada, and that's where Canada starts now in the manufacturing industry.”

Cassidy explained he spent the last seven weeks persistently communicating with all levels of local government to keep the situation at the forefront, saying future generations will reap the benefits of this investment.

🚨 Ontario and Canada have established a historic new EV and battery auto pact that will secure the next generation of auto jobs for Canadian workers for today, tomorrow, and the future.

When #TeamCanada works together, there’s nothing we can’t do.https://t.co/0DLOYIDhKD pic.twitter.com/q08SNdm7zM

— Doug Ford (@fordnation) July 6, 2023

The auto pact also extends to Volkswagen which is developing an overseas electric vehicle battery cell manufacturing plant in St. Thomas, Ont., where the company could receive up to $13 billion in performance incentives.

“As part of the auto pact for those two deals agreed on by both governments, the federal government will provide two-thirds of funding and Ontario will provide one-third of funding, for these two projects, as a direct response to incentives offered by the U.S. government,” the statement said. “These performance incentives are contingent on, and proportionate to, the production and sale of batteries from each project, and should the incentives offered under the U.S. IRA be reduced or cancelled, so would the performance incentives under the agreement.”

The statement says this step will help to drive further growth across Canada and Ontario’s auto manufacturing supply chains and related sectors.

The final agreement with Stellantis includes a number of conditions:

• The governments will only provide a performance incentive for batteries that Stellantis produces and sells, in line with the conditions in the agreement for the Volkswagen battery cell manufacturing plant
• Stellantis will uphold its existing commitments in Canada and Ontario, including a production mandate at its plant in Brampton, Ont.
• The company will invest more in Canada and Ontario, including for the establishment of a research and development facility in Windsor, Ont.
• The operating expenses provided will only be available for as long as the U.S. Inflation Reduction Act incentives remain in effect
• The federal government has agreed to provide Stellantis with a performance incentive on a per unit production basis of up to US$45 per kWh (US$35 per kWh for battery cells and US$10 per kWh for battery modules). Canada’s performance incentive is subject to an overall cap of C$15 billion, of which one-third is to be paid by the Ontario government. 

“I'm so happy for our community,” exclaimed Windsor-Tecumseh MPP Andrew Dowie. “This is the first time that a sub national government participates in international trade subsidies.”

Dowie continued, “This isn't something that we're used to. But we have a provincial government that sticks with the workers of Windsor and is in our corner and that I think is the best part of it all, to know that they're going to go to bat for us and do what needs to be done to ensure our success.”

Dowie said he’s happy the provincial government contributed $5 billion to ensure the deal was reached.

“Young people are going to be able to grow up in our community and have employment opportunities of their choice,” Dowie said. “This is a great investment in our future. I can't wait to see the future of our community. And this agreement has been reached is truly transformative.”

Dowie added, “There's a lot of work that has been happening at the municipal level, at the provincial level, and at the federal level, and I'd say no effort on any side has dwarfed the other. Everyone has pulled in the same direction and all levels of government have been contributing and ensuring that this project would be a success, not only to develop the site, but to even land the plant here.”

Dowie suggested the deal could pave the way for future investment agreements, “There's no one single government that is responsible for this. This is all levels of government that have worked together to expedite permits, expedite approvals, and it's actually a great, a great first step and seeing how can we modernize the system for everybody. Because we know we were able to find some ways of doing business a bit better because of this particular project.”

Windsor-Tecumseh MP Irek Kusmierczyk agreed, telling CTV News that partnerships between governments, regardless of party, was imperative for securing the new investment, “Huge relief, huge excitement. And this is really the dawn of a new day for our community.”

“All parties came to the table. It really is that partnership,” Kusmierczyk said. “It really is that partnership that secured this deal and it really is what’s going to secure the additional investments later on that we’re already seeing knocking on our door. Because again, industry sees the tremendous opportunities here in Canada. They see that we have the most skilled workforce. They see the fact we have a federal government working together hand in hand with the province and with the labor with industry and they want to invest here.”