In a significant move that reshapes the landscape of battery manufacturing in Canada, South Korea's LG Energy Solution has taken full control of NextStar Energy from Stellantis, an automotive giant.
NextStar was established as a collaborative effort between these two companies in 2022, with the ambitious goal of developing Canada’s very first large-scale battery manufacturing facility located in Windsor, Ontario. This facility was initially intended to focus on supplying batteries primarily for the automotive sector. However, in a surprising turn of events announced last November, it was revealed that the plant would shift its focus towards producing batteries for power grid storage systems instead.
Stellantis confirmed its decision to sell its 49% stake in NextStar to LG Energy Solution in a statement released on Friday morning. Despite this divestiture, Stellantis has reassured stakeholders that it will remain a loyal customer, continuing to procure battery products from NextStar.
Currently, the Windsor plant employs approximately 1,300 individuals, with aspirations to expand its workforce to 2,500 in the future. The Canadian federal government has pledged up to $10 billion in production subsidies to support NextStar Energy, with an additional $5 billion coming from the provincial government.
Danies Lee, the CEO of NextStar, commented on the ownership change, stating, "This new ownership structure strengthens Canada’s position as a leader in battery manufacturing. It provides long-term certainty to continue investing in our Canadian workforce and our manufacturing capacity while delivering sustained economic benefits for Canada and Ontario."
Officials in the province have assured the public that this transition in ownership will not result in any job losses at the facility. Jennifer Cunliffe, a spokesperson for Vic Fedeli, Ontario’s Minister of Economic Development, Job Creation, and Trade, emphasized, "This transfer in ownership will not lead to any job losses at the facility."
Interestingly, this announcement coincided with Stellantis revealing a substantial reduction in its electric vehicle ambitions, causing a sharp decline in its stock prices—plummeting by as much as 25% on Friday, marking the lowest point since the company was formed in early 2021 through the merger of Fiat Chrysler and PSA Group, the maker of Peugeot.
Antonio Filosa, CEO of Stellantis, remarked, “By enabling LG Energy Solution to fully leverage the Windsor facility’s capacity, we are strengthening its long-term viability while securing the battery supply for our electric vehicles. This is a smart, strategic step that supports our customers, our Canadian operations, and our global electrification roadmap.”
The news regarding the ownership transition arrives just as Canada has announced the cancellation of its electric vehicle mandates requiring that 60% of all new cars sold be electric by 2030, escalating to 100% by 2035. Instead, the government is reinstating EV incentives, offering individuals and businesses up to $5,000 over the next five years when they purchase an electric vehicle.
The local union representing workers at the Windsor factory expressed optimism about continuing their relationship with LG Energy. Unifor stated in an online message, "We commend LG for its versatility in pivoting to maintain production in a changing marketplace. Local 444 members at NextStar will continue to be employed under the terms of their collective agreement, which is set to expire in July of this year," while simultaneously urging Stellantis to meet what they refer to as "outstanding obligations" to workers at the currently idled Brampton Assembly Plant.
