Companies target production start in first quarter of 2024
The Windsor region was thrust into the future of an electrified auto industry Wednesday with the announcement that Stellantis and LG Energy Solution will build a $5 billion automobile battery plant on the city’s east flank that will employ 2,500 people.
The Windsor region was thrust into the future of an electrified auto industry Wednesday with the announcement that Stellantis and LG Energy Solution will build a $5-billion automobile battery plant on the city’s east flank that will employ 2,500 people.
Canada’s first giga factory will cover 4.5 million square feet (418,000 square metres), making it slightly larger than Stellantis’s Windsor assembly plant, and is the largest investment in the history of the Canadian auto industry.
The plant will be located on 220 acres (88 hectares) at the corner of EC Row Avenue and Banwell Road.
“We’re going to be manufacturing in the Windsor region hundreds of thousands of batteries for the whole North American ecosystem for Stellantis; this is huge,” said federal Minister of Innovation, Science and Industry Francois-Philippe Champagne.
“With this type of investment, you know they’re going to here for decades to come.
“The best thing is, this morning, I was having breakfast with the folks from LG and we’re already talking about an expansion. They’re already thinking, what more can we do?”
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In addition to the 2,500 direct jobs, it’s expected the spinoff jobs in the supply chain will be four to seven times that number.
The magnitude of the announcement could be measured in the number and significance of the collection of local, provincial and federal leaders, business and community representatives in attendance.
Prime Minister Justin Trudeau, who had planned to attend before being called away to a NATO meeting in Brussels, sent a recorded message calling the plant an investment in the future of the country.
With the capacity to produce 45 gigawatts annually, the plant would be the largest of the 13 battery plants announced to begin production in North America by 2025.
“Attracting this multibillion-dollar investment will secure Ontario’s place as a North American hub for building the cars and batteries of the future,” Ontario Premier Doug Ford said.
“As we secure game-changing investments, we’re also connecting resources, industries and workers in northern Ontario with the manufacturing might of southern Ontario to build up home-grown supply chains.
“Every region of Ontario will benefit with thousands of jobs being created and a stronger economy that works for everyone.”
Both the province and federal governments have committed hundreds of millions of dollars of incentives to land the plant.
Those figures weren’t released on Wednesday for competitive reasons at the request of the companies.
Mark Stewart, Stellantis chief operating officer for North America, said the plant would supply the company’s assembly plants across Canada and the U.S.
He expects construction to begin this summer with the first products being available in mid-2024. The plant will reach full operational capacity in 2025.
“It (Windsor) will supply 50 per cent of our (North American) volume,” said Stewart, who added the location of the company’s second battery plant in the U.S. will be announced shortly.
“There will be room for expansion. As we did our site selection, we made sure it was future-proofed as well.”
Stewart said the company’s familiarity with the community and being home to Canada’s largest auto cluster were significant factors in Windsor being selected.
“This is one of the most-storied areas of the company,” Stewart said.
“We have families in this community that are multigenerational. We feel putting the business here for our new joint venture is the right thing to do.
“Proximity is very good as well. From a logistics flow, it makes lots of sense.”
Denise Gray, LG Energy Solution’s head of external affairs and government relations, credited the aggressive pursuit of the plant by all levels of government for the region’s success.
It’s LG’s first major manufacturing plant in Canada.
“Windsor has offered an amazing amount of capability from financial, from workforce to a spirit of really wanting to get it done that really attracted LG Energy Solutions to select Windsor,” Gray said.
The announcement secures a key pillar in the Windsor region’s economic development strategy to fully exploit the auto industry’s electrification.
“It’s a five-year overnight success story,” said Invest WindsorEssex chief executive Stephen MacKenzie, whose organization began putting the pieces in place in 2017 to transform the region into Canada’s automobility capital.
“Everyone in our local ecosystem played an important role. This region has landed a foundational piece for its future.”
The city’s role was to assemble the land for the site, which wasn’t initially on the market. There’s one residential lot the city is still negotiating to acquire.
The land acquisition is expected to cost $40 million to $50 million.
The city also will offer tax breaks under its community improvement plans that will see the site taxed at current agricultural rates for the first 20 years and chip in about $8 million for mostly site-related preparations.
“This investment is similar to going from the horse-and-buggy era to internal combustion engines,” Windsor Mayor Drew Dilkens said.
“It’s that big. It’s transformational.”
The speed at which this deal evolved reflects the pace of the electric revolution consuming the auto industry.
The companies first contacted Invest WindsorEssex on Feb. 11, 202
1, less than a month after Stellantis was formed by the merger of PSA Group and Fiat FCA. By early January 2021 Stellantis, the world’s fourth largest automaker, informed the city it was favouring locating in the area over competition from other Ontario municipalities and U.S. states.
“For a deal this size, this has moved very rapidly,” said Invest WindsorEssex’s director of business attraction Joe Goncalves, who spearheaded the organization’s pursuit of a battery plant.
“We had to make the sale of the area to the companies first, then the government incentives came into play.”
The companies began serious interaction with city officials only days after Stellantis announced its intention to build two North American battery plants during its EV Day on July 8, 2021.
Stellantis will oversee construction of the plant while LG Energy Solutions will handle its operations.
Goncalves said representatives from the companies visited the area four times between July 2021 and the end of October.
He added a big plus for Windsor was having the infrastructure, such as sewer capacity and wastewater management, already in place at the site and a reliable source of clean energy.
It also was made quite clear that Wednesday’s announcement is only the beginning of more positive news for Southwestern Ontario.
Champagne said he’s already focusing on securing companies to build the foundation for an entirely new segment of the domestic automotive supply chain.
“LG is looking to expand enormously in North America,” Gray said. “We feel these are awesome opportunities for investment.
“We’re hoping to continue to develop supply chains and the closer we can get it to where we are the better.”