Stellantis sells stake in Ontario battery factory to South Korea’s LG Energy Solution
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South Korean-based LG Energy Solutions has acquired full ownership of Nextstar Energy from automaker Stellantis.
Nexstar was a joint venture between the two companies to build Canada’s first large-scale battery manufacturing facility in Windsor, Ontario in 2022.
In November, it was announced that batteries made at the plant would now be prioritized for power grid storage systems, and not primarily for the automotive industry as originally promised.
Stellantis said in a statement Friday morning that it would sell its 49 percent equity stake in Nexstar to LG Energy Solutions.
Stellantis says it remains a “committed customer” and will continue to receive battery products from Nextstar.
To date, the companies say the Windsor plant employs about 1,300 people and the long-term goal is to have 2,500 employees.
The federal government has previously pledged up to $10 billion in production subsidies to Nexstar Energy. The other $5 billion is coming from the provincial government.
“This new ownership structure strengthens Canada’s position as a leader in battery manufacturing,” said Denise Lee, CEO of Nexstar.
“This provides long-term certainty to continue investing in our Canadian workforce and our manufacturing capacity, while providing continued economic benefits for Canada and Ontario.”
The move comes on the same day Stellantis announced a massive scale back of its electric vehicle ambitions, sending its shares plunging as automakers pay the price of the wrong decision to switch to cleaner driving.
The company’s Milan-listed shares fell as much as 25 percent on Friday, the lowest since Stellantis was created in early 2021 through the merger of Fiat Chrysler and Peugeot maker PSA.
“By enabling LG Energy Solutions to fully leverage the capacity of the Windsor facility, we are strengthening its long-term viability while securing battery supply for our electric vehicles,” Antonio Filosa said in a statement released Friday. He is the CEO of Stellantis.
“This is a smart, strategic move that supports our customers, our Canadian operations and our global electrification roadmap.”
News of the ownership change comes a day after Canada announced, among other things, that it was scrapping the EV mandate, which would have required 60 per cent of all new cars to be electric by 2030 and 100 per cent by 2035.
Instead, EV incentives will return with a five-year program that will give people and businesses up to $5,000 in rebates if they buy one.
union reaction
The union representing workers at the Windsor factory says it looks forward to continuing its bargaining relationship with LG.
In an online statement, Unifor says it commends LG for its “versatility to maintain production in a changing marketplace.”
“Local 444 members at Nexstar will continue to be employed under the terms of their collective agreement, which is set to expire in July this year,” the union said, while also demanding Stellantis meet “outstanding obligations” to members at its idled Brampton Assembly Plant.
more to come.
