(Ottawa) Stellantis and LG Energy Solution say their electric vehicle battery plant in Windsor is back on track after reaching a “binding” funding agreement with the governments of Canada and Ontario.

The two companies halted construction earlier this year to negotiate government funding equivalent to what the United States would provide under its new Inflation Reduction Act (IRA). .

In a statement released late Wednesday, the two companies said construction of the plant, which they call NextStar Energy, will resume immediately.

“We are pleased that the federal government, with the support of the provincial government, has reversed its decision and delivered on its commitment to level the playing field with the IRA,” said Mark Stewart, Chief Operating Officer of Stellantis in North America, in a press release.

Ottawa also confirmed the conclusion of the agreement in a joint statement by the Minister of Finance, Chrystia Freeland, as well as the Minister of Innovation, Science and Industry, François-Philippe Champagne.

“This deal is good for workers and good for Canada. It will create and secure thousands of jobs, both in the automotive industry and in related industries in Canada, and strengthen Canada’s position as a leader in the global electric vehicle supply chain,” said the two federal elected officials.

The plant was first announced in the spring of 2022. The federal government and Ontario were to contribute funding of $500 million each for construction.

Stellantis and LG Energy returned to the negotiating table a few months later, when the US Inflation Reduction Act put billions of dollars in production tax credits on the table for battery makers across the country. south of the border.

In March, Canada reached a deal that will see Volkswagen get up to $13 billion in production subsidies for batteries it will produce at a planned plant in St. Thomas, Ontario. Stellantis and LG Energy wanted a similar deal to pursue their factory project in Windsor.

“It’s a good day not only for our joint venture, but also for Canada,” Dong-Myung Kim, president of LG Energy Solution’s Advanced Automotive Battery Division, said in a statement. We are happy to finally move forward with the construction of the country’s first major battery factory and to play a central role in the local battery ecosystem. »

The companies said production is expected to start next year with an annual generating capacity of more than 45 gigawatt hours.

Mr. Stewart also thanked Lana Payne and her team at Unifor, the important union that has helped keep the dialogue going between governments and Stellantis.

“This is great news for the automotive industry, but it’s also incredible news for our members who have worked for Stellantis, who work in the supply chain, across Southwestern Ontario,” she said.

Ms. Payne said it was “out of the question” that Unifor would lose the thousands of jobs that will flow directly and indirectly from the plant.

The provincial government did not immediately respond to a request for comment.