Stellantis is selling its ownership stake in NextStar Energy to its partner in the joint venture, LG Energy Solution.
The joint venture was created in 2022 to build a battery manufacturing plant in Windsor, Ontario. The facility is the first large-scale plant in the sector to be built in Canada, and it was to have focused on supplying EV battery storage systems to the auto industry. Last November, NextStar Energy announced that, in response to changing market conditions in the vehicle electrification sector, it would pivot to the manufacture of power grid storage solutions.
Big EV pullback
Stellantis currently owns a 49-percent equity stake in the NextStar Energy, but it confirmed this morning that is selling that stake to LG Energy Solution. The announcement accompanied a broader one by the automaker confirming $26.5 billion USD in charges arising from a large scale-back of its electrification strategy. Stated Stellantis CEO Antonio Filosa this morning, “The charges announced today largely reflect the cost of overestimating the pace of the energy transition that distanced us from many car buyers' real-world needs, means and desires.”
The auto giant maintains that despite the sale of its stake in the joint venture, it will remain a “committed customer” for battery systems from NextStar and its Ontario plant. The plant currently employs around 1,300 workers, with a projected workforce of 2,500 in the longer term.
Government subsidies
Both the federal and Ontario governments pledged significant production subsidies to the joint venture - $10 billion for Ottawa and $5 billion for the province.
There’s no indication that the sale of Stellantis’ share to LG will have any impact on production at the facility or on the support provided by the two levels of government. Both NextStar and Stellantis portray the sale as a positive development:
“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.”
- Danies Lee, NextStar CEO
“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.”
- Antonio Filosa, Stellantis CEO