Stellantis Sells Ontario Battery Factory Stake to LG Energy Solution
In a significant shift within the electric vehicle industry, Stellantis has sold its 49 percent stake in NextStar Energy to LG Energy Solution. The move secures LG Energy Solution’s full ownership of the battery manufacturing company, originally established as a joint venture in 2022. NextStar Energy operates Canada’s first large-scale battery manufacturing plant located in Windsor, Ontario.
Details of the Transaction
This acquisition, confirmed in a statement by Stellantis, emphasizes the company’s commitment to continue sourcing products from NextStar. Stellantis remarked that they remain a dedicated customer despite relinquishing their stake.
Workforce Implications
- The Windsor battery facility currently employs approximately 1,300 individuals.
- There is a long-term goal to expand this workforce to 2,500 employees.
- Officials from the provincial government assured that there would be no layoffs resulting from this ownership transfer.
Jennifer Cunliffe, a spokesperson for Ontario’s Minister of Economic Development, Job Creation and Trade, confirmed that job stability at the facility would be maintained post-sale.
Financial Backing and Future Plans
The federal government has previously pledged up to $10 billion in production subsidies for NextStar Energy. An additional $5 billion is provided by the provincial government. This financial support aims to strengthen Canada’s position as a leader in battery manufacturing.
Statements from Leadership
Danie Lee, CEO of NextStar, highlighted that this new ownership structure enhances long-term investment in the Canadian workforce and manufacturing capabilities. He stated it would deliver sustained economic benefits for Canada and Ontario.
Antonio Filosa, CEO of Stellantis, expressed confidence that enabling LG Energy Solution to leverage the Windsor facility’s capacity would enhance its viability and secure battery supplies for electric vehicles.
Market Context and EV Policy Changes
The announcement comes amid revisions to EV mandates in Canada, which were set to require that 60 percent of new cars be electric by 2030. Instead, the government will implement a five-year incentive program offering up to $5,000 to individuals and businesses purchasing electric vehicles.
Union Response
The union representing Windsor factory workers, Unifor, expressed optimism about the ongoing relationship with LG Energy Solution. They acknowledged LG’s adaptability in maintaining production within a dynamic market landscape. The union also emphasized that Local 444 members will retain their positions under existing collective agreements, which expire in July.
In summary, the transfer of ownership marks a pivotal moment for both Stellantis and LG Energy Solution, shaping the future of battery manufacturing in Ontario and reinforcing their strategic plans in the evolving electric vehicle market.
