Canada agrees battery incentives deal for Stellantis, LGES plant

Canada agrees battery incentives deal for Stellantis, LGES plant

Canada agrees battery incentives deal for Stellantis, LGES plant 756 832 Energy Storage Journal

July 13, 2023: Stellantis and LG Energy Solution (LGES) are resuming construction of their NextStar Energy EV battery plant in Canada under a deal worth up to C$15 billion ($11.4 billion) in tax breaks for the project, Ontario’s provincial government confirmed on July 6.

The battery partners had been pressing provincial and federal government leaders to scale up support for NextStar in line with that available in the US under the Inflation Reduction Act.

Now Ontario is to provide C$5 billion in tax breaks for the project with a further C$10 billion coming from the federal government.

Production at the plant is planned to start in 2024 with an eventual annual production capacity in excess of 45GWh.

A statement issued by Ontario premier Doug Ford (pictured) and other ministers said the incentives were a direct response to those offered by the US government — but warned they could be reduced or cancelled if the US should drop its support for battery makers.

Ford said the deal also extends to a project by Volkswagen and its subsidiary PowerCo SE to establish the auto giant’s first overseas EV battery cell manufacturing plant in Ontario. Volkswagen could receive up to C$13 billion in performance incentives.

However, incentives are linked to the amount of batteries that Stellantis produces and sells, in line with the conditions in the agreement for the Volkswagen battery cell manufacturing plant.

NextStar Energy is one of eight battery plants that LGES has secured in North America in response to its growing EV market.