Stellantis blocks battery plant construction as more support sought

Canadian Prime Minister Justin Trudeau tours Windsor Assembly Plant12

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OTTAWA, May 15 (Reuters) – Automaker Stellantis (STLAM.MI) has stopped construction at a more-than C$5 billion ($3.7 billion) electric-vehicle battery plant in Canada amid talks with the federal and provincial governments about their support for the factory.

"Effective immediately, all construction related to the battery module production on the Windsor site has stopped," the spokesperson said. However, some construction related to battery cell production continues, the spokesperson said.

Stellantis says the government has not delivered what was agreed last year, the spokesperson said.

The move comes a month after Canada agreed to provide up to C$13 billion in subsidies and a C$700 million grant to lure German automaker Volkswagen AG (VOWG_p.DE) to build its North American battery plant in the country.

The federal government says it is in talks with Stellantis' management and that the issues can be resolved.

"I am absolutely confident that we're going to get a deal. But I also want to point out that the resources of the federal government are not infinite," Finance Minister Chrystia Freeland told reporters, adding that the provincial government of Ontario must do its "fair share".

The Volkswagen battery gigafactory is the biggest single investment ever in the country's electric-vehicle supply chain.

"It really worries me. We need the federal government to step up as they did for Volkswagen," Ontario Premier Doug Ford told reporters when asked about the construction halt.

LGES and Stellantis had announced their battery plant investment in the country last year, aiming for an annual production capacity in excess of 45 gigawatt hours (GWh) and expected to create an estimated 2,500 new jobs in the Windsor area.

($1 = 1.3372 Canadian dollars)

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