Stellantis sells its stake in battery plant for US$100, amidst major write-down on EV investments

That Stellantis would exit its position in the Nexstar EV battery plant in Windsor reveals something about the way that the auto sector is shifting. Photo by Dan Janiss/Windsor Star/Postmedia files

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Global automaker Stellantis NV has sold its 49 per cent stake in Canada’s first and only multibillion-dollar battery cell manufacturing plant to its joint venture partner for just US$100.

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LG was already the majority partner, owning 51 per cent of the sprawling 4.23-million-square-foot battery plant in Windsor, Ont.

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LG said it would use the plant to serve a broader customer base, potentially by making electric vehicle batteries for many automakers rather than just Stellantis. The company already has relationships with General Motors Co., Honda Motors Co. Ltd., Hyundai Motor Group and others.

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“This enables us to open our doors to a wider range of (automaker) OEM customers while continuing to scale operations,” said Brett Hillock, chief operating officer of NextStar Energy Ltd., the LG subsidiary that is now sole owner of the plant.

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Last year, amidst slumping EV sales in the United States and Canada, the two markets the plant was designed to serve, it pivoted to producing utility-scale batteries for energy grid storage. The batteries allow utilities to store energy produced during non-peak hours so that it can be deployed as demand rises.

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But LG, which is the largest lithium-ion battery producer outside China, also produces batteries for a range of products, such as laptops, phones and more, and the company said it would consider serving a broader customer base.

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Stellantis, which still makes electric vehicles in Canada, said it would continue to rely on the battery plant for products.

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The companies said in a press release that more than $5 billion has been invested in the facility, which employs about 1,300 people.

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LG’s Feb. 6 filing with Korea’s Financial Supervisory Service said the company’s board in 2022 committed to investing almost US$1.5 billion in the battery plant. It also refers to a debt guarantee for an undisclosed amount by Stellantis.

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The facility was slated to receive about $1 billion in support for construction from the federal and Ontario governments, split evenly, plus commitments for operating subsidies based on production levels that could add up to tens of billions of dollars. It is not clear if any of those agreements are affected by the sale.

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The transaction comes at a pivotal moment. South Korea is currently competing with Germany to win a multibillion-dollar contract to build a dozen submarines for Canada.

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