Canadian Government to Provide Subsidies Equivalent to US IRA
Immediate Resumption of Halted Module Factory Construction
From the left, Mark Stewart, COO of Stellantis; Doug Ford, Premier of Ontario, Canada (fourth from the left); Fran?ois-Philippe Champagne, Canadian Minister of Innovation, Science and Industry (fifth from the left); and Kim Dong-myeong, Vice President and Head of Automotive Battery Division at LG Energy Solution (sixth from the left) are taking a commemorative photo at the 'LG Energy Solution-Stellantis Joint Venture Plant' in Windsor, Ontario. Photo by LG Energy Solution
LG Energy Solution and Stellantis joint venture Nextstar Energy have reached a final agreement with the Canadian government on the conditions for battery production subsidies.
On the 6th, Nextstar Energy officially announced, "We have signed a contract that guarantees a stable future for battery cell and module production in the Ontario region of Canada," adding, "The Canadian government has promised subsidies at a level equivalent to the U.S. Inflation Reduction Act (IRA)."
LG Energy Solution and Stellantis decided to immediately resume construction of the battery module plant, which had been halted since May 15. The plant, to be established in Windsor, Ontario, Canada, will have an annual production capacity of 45GWh and is scheduled to begin operations in 2024. The two companies expect approximately 2,500 new jobs to be created through the establishment of the plant.
Kim Dong-myung, Head of the Automotive Battery Division at LG Energy Solution, stated, "This is a meaningful decision for LG Energy Solution, Stellantis, and the Canadian government, and we are pleased to resume construction of the new plant that will grow into a key base in the North American electric vehicle and battery market."
He also expressed deep gratitude, saying, "We sincerely thank the Korean government, which spared no effort in support throughout the agreement process, as well as the officials of the Canadian government."
Mark Stewart, North American COO (Chief Operating Officer) of Stellantis, said, "The U.S. IRA has completely changed the battery production environment in North America, and without support at an equivalent level, competitive battery production in Canada has become difficult. We thank the Canadian federal and provincial governments, as well as Canada’s largest auto union Unifor, who led this agreement, and we will immediately resume the halted plant construction."
Lee Hoon-sung, CEO of Nextstar Energy, said, "Nextstar Energy is one of the eight LG Energy Solution production plants in North America expected to experience high growth. We will produce the highest quality batteries in Windsor, Canada, and continue to grow steadily with the local community."
Meanwhile, LG Energy Solution specifically expressed deep gratitude for the successful agreement, stating, "We especially thank the Korean government for its comprehensive support that led to the proactive response of the Canadian government and ensured that the positions of our company and Stellantis were clearly communicated." Earlier, at the Korea-Canada 60th anniversary summit held in May, President Yoon Suk-yeol and Prime Minister Justin Trudeau promised to strengthen solidarity for sustainable growth and prosperity, and through the first-ever high-level economic security dialogue between the foreign and industry ministers, they pledged close cooperation.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
