Stellantis, LG Energy Solution invest $5 billion CAD for Li-ion battery plant in Canada
Stellantis N.V. and LG Energy Solution (LGES) have finalized binding and definitive agreements to establish their first large-scale EV battery manufacturing facility in Canada. The joint venture company made for this purpose will manufacture lithium-ion battery cells and modules to meet a significant portion of Stellantis' vehicle production requirements in North America, according to the announcement.
The partnering companies are investing more than $5 billion CAD ($4.1 billion) to establish their joint venture operations, including a new battery manufacturing plant located in Windsor, Ontario. Plant construction activities are scheduled to begin later this year, with production operations planned to launch in the first quarter of 2024.
The plant will have an annual production capacity of over 45 GWh. With Ontario being home to Canada's largest automotive cluster, Stellantis and LGES expect the plant to serve as a catalyst for the establishment of a strong battery supply chain in the region.
Canada is committed to establishing a broad, local battery ecosystem by leveraging, among other things, its leadership in the generation of electricity from renewable sources, the companies said.
"Our joint venture with LG Energy Solution is yet another stepping stone to achieving our aggressive electrification road map in the region, aimed at hitting 50 percent of BEV sales in the U.S. and Canada by the end of the decade," said Carlos Tavares, Stellantis CEO.
"We are grateful to the municipal, provincial, and federal levels of government for their support and commitment to help position Canada as a North American leader in the production of electric-vehicle batteries", he added.
Stellantis has already announced plans to have global annual BEV sales of 5 million vehicles by 2030, reaching 100 percent of passenger car BEV sales mix in Europe and 50 percent passenger car and light-duty truck BEV sales mix in North America.
The company has also increased planned battery capacity by 140 GWh to approximately 400 GWh, to be supported by five battery manufacturing plants together with additional supply contracts.
"Through this joint venture, LG Energy Solution will be able to position itself as a critical player in building green energy value chains in the region," said Youngsoo Kwon, CEO of LG Energy Solution. "Creating a joint venture battery manufacturing company in Canada, recognized as one of the leading nations in renewable energy resources, is key for LG Energy Solution as we aim to power more electric vehicles around the world."
LG Energy Solution, on the other hand, has solidly secured a production capacity of over 200 GWh in North America annually, translating into the production of 2.5 million high-performance electric vehicles. The battery manufacturer has previously announced plans to invest approximately $4.6 billion (USD) into battery facilities in North America.
Globally, LGES is on course to expand its international production network in multiple continents, including countries such as Canada, U.S., Poland, Indonesia, China, and South Korea.