Stellantis NV, in collaboration with LG Energy Solution Ltd., announced plans for a new electric-vehicle battery plant in Windsor, Ontario, last year. However, construction has been paused as negotiations with Prime Minister Justin Trudeau's government continue regarding additional financial support. According to calculations by Johns Hopkins University professor Bentley Allan, the subsidies Stellantis is likely to receive could surpass the $13 billion package secured by Volkswagen for a similar project. Allan estimates the total cost to Canada over a decade could reach $19 billion, equivalent to what Stellantis would receive under the Inflation Reduction Act (IRA) if the plant were located in the United States. However, Trudeau's recent budget measure to introduce investment tax credits could help mitigate equipment costs for the factory, potentially lowering the overall expenditure. The significant expense of these plants is due to U.S. legislation signed by President Joe Biden, which not only subsidizes the capital costs of building and equipping new plants but also supports the production of battery cells. While negotiations continue, the outcome will likely have substantial implications for Canada's electric-vehicle manufacturing sector and its efforts to compete in the global EV market.
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