Ottawa and Ontario to invest in electric vehicle battery plant

Ontario’s auto industry is getting a much-needed jolt.

The provincial and federal governments are plugging hundreds of millions of dollars into a new electric vehicle battery plant in Windsor in an attempt to offset a much larger flow of EV investments to the United States under President Joe Biden’s “Buy America” push.

The $4 billion factory — to be announced Wednesday by automaker Stellantis (formerly Fiat Chrysler) and its battery partner LG Energy — will see contributions larger than the $132 million each level of government gave Honda last week to expand its plant in Alliston, sources told the Star.

Locating the plant in Ontario raises the odds of building more electric vehicles in the province as car companies speed their transition from internal combustion engines, said Flavio Volpe of the Automotive Parts Manufacturers’ Association.

“We’ve landed a big one. This is major investors doing a generational investment on this side of the Detroit River,” Volpe added.

“It says they’re comfortable they can go to their shareholders, their boards of directors and say this Buy America policy, just like every other Buy America since (former US president Richard) Nixon, starts off very strict, but ultimately includes Canada. ”

The “Buy American” policy, which Premier Doug Ford traveled to Washington, DC on Monday to combat, would provide hefty subsidies for consumers south of the border to buy US-made electric vehicles.

In a speech there, Ford urged Americans to keep “two-way trade flowing” for the sake of jobs in both countries, and noted Ontario’s mining sector is “unlocking the northern minerals that will power batteries of the electric vehicle revolution.”

Ford is traveling to Windsor for the announcement with Francois-Philippe Champagne, the federal minister of innovation, science and industry, and federal Transportation Minister Omar Alghabra.

Having the battery plant in Windsor is seen as a good omen for the Stellantis auto assembly plant in Brampton, which employs 3,000 workers building gas-powered muscle cars that are being phased out in December 2023. The plant, which has no product mandate beyond that date, also accounts for about 10,000 jobs at suppliers.

Replacement electric models are expected to be made in Belvidere, Ill. to take advantage of Biden’s EV subsidies, which are worth up to $12,500 (US) for domestic buyers of union-made vehicles.

“If you’re going to be in the business of making batteries at volume in Ontario, the prospects appear a little brighter today for Brampton,” said Volpe.

The Windsor investment follows at least $25 billion in EV expansions by various automakers into Michigan, Tennessee, Kentucky and Ohio that raised concerns about Ontario being left behind.

“Ontario is getting a fraction of that even though we’re a major automotive producer and I think it’s because the Ford government has been so actively hostile to EVs up until the last six months,” said Green Leader Mike Schreiner.

“We have to shift gears quickly.”

Ford suggested last week that Ontario would not restore the EV purchase subsidies for consumers he axed upon taking power in 2018 but would increase the building of EV charging stations, the pace of which critics say has been far too slow to encourage buyers to go electric.

All opposition parties have promised to restore EV subsidies if elected in the June 2 provincial election.