Construction of a Stellantis NV (NYSE:STLA) battery plant in Windsor, Ontario remains at a standstill after the automotive giant, and its partner LG Energy Solution Ltd (KS:373220), halted progress on May 15 when the companies alleged the federal government wasn’t holding up its end of a deal potentially worth billions in incentives.
In a letter dated April 19, the heads of Stellantis and LG Energy Solution told Prime Minister Justin Trudeau the project was in jeopardy if he did not honor what the company says was a promise in writing to close the “competitive gap posed by the U.S. legislation,” according to reports.
The letter, signed by Stellantis CEO Carlos Tavares and LG Energy Solution CEO Young Soo Kwon, asked the prime minister to “urgently” sign off on an agreement reached at the end of February to match U.S. production subsidies for green energy and manufacturing projects offered by the Biden administration.
The federal government promptly shifted blame to the Ontario government, asking it to pay “their fair share,” without elaborating.
Ontario Premier, Doug Ford said May 19 that his government would offer more support.
“I will confirm we're putting more money on the table,” he said after an unrelated announcement in St. Catharines, Ont. “This is all about saving jobs and giving people the quality of life they deserve in southwestern Ontario.”
However, construction remains stopped for the module building.
Shares of STLA are down 1.6% in afternoon trading on Tuesday.