 |
Executives of LG Energy Solution and Stellantis pose for a photo to announce their joint battery venture in Ontario, Canada, on March 23, 2022. Mark Steward, chief operating officer for North America at Stellantis (first from left) and Kim Dong-myeong, president of advanced automotive battery division at LG Energy Solution (fourth from right), were in attendance. (LG Energy Solution) |
The joint battery venture between LG Energy Solution Ltd. and Stellantis N.V. will receive up to C$15 billion ($11.2 billion) in incentives for their electric vehicle battery plant under construction in Ontario, Canadian government officials have said.
The announcement on Thursday came a day after LGES and Stellantis said they had resumed the construction of the manufacturing facility upon the agreement reached with Canada on the terms of subsidies, to the extent that they would be equivalent to the financial support offered by the US under the Inflation Reduction Act, which provides tax credits of up to $7,500 to buyers of EVs assembled only in North America.
"Canada and Ontario will provide performance incentives to Stellantis-LGES of up to $15 billion, subject to conditions and benefits to Canada and Ontario," they said.
The federal government will provide two-thirds of the funding, and Ontario will provide one-third.
The incentives will be "contingent on and proportionate to" the production and sale of batteries and are subject to a reduction or cancellation if such changes are applied to the incentives under the IRA, they added.
NextStar Energy, the joint venture, had halted part of the construction since May over a delay in setting the conditions for incentives due to a disagreement between the Canadian federal and local governments over who should pay more.
LGES, the world's second-largest battery producer, launched the 4.8 trillion-won ($3.6 billion) venture with the world's No. 4 automaker in March last year to build an EV battery manufacturing plant in Windsor.
The plant, scheduled to be completed in the first half of 2024, will have an annual production capacity of 45 gigawatt hours. (Yonhap)
