Automaker Stellantis has stopped all construction at a more-than C$5 billion ($3.74 billion) electric vehicles battery manufacturing plant in Windsor, Canada, over a disagreement with the federal government about subsidies, a spokesperson for the company said on Monday.
“Effective immediately, all construction related to the battery module production on the Windsor site has stopped,” the spokesperson said.
A spokesperson for Canada’s Innovation Minister, Francois-Philippe Champagne, did not immediately respond to a request for comment.
The move comes days after the carmaker and South Korea’s LG Energy Solution Ltd (LGES) said they were implementing “contingency plans” related to a more-than C$5 billion ($3.74 billion) battery plant investment in Canada.
Champagne, who described the deal as Stellantis’s largest ever in the Canadian auto sector when it was announced, on Friday said the “auto industry is crucial to the Canadian economy and to the hundreds of thousands of Canadian workers”.
LGES and Stellantis 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.
In April, Canada had also agreed to provide up to C$13 billion in subsidies and a C$700 million grant to lure Volkswagen AG into building its North American battery plant in the country.
Canada’s deal with the German automaker for a battery gigafactory, announced this year, is the biggest single investment ever in the country’s electric-vehicle supply chain.
(Reporting by Ismail Shakil in Ottawa and Nathan Gomes in Bengaluru; Editing by Pooja Desai)