Ontario boosts financial support for Stellantis (STLA) to resume battery plant

On Friday, Premier Doug Ford of Ontario announced that his government would increase its financial support to help Stellantis (NYSE: STLA)) resume construction of its battery plant in Canada.

Stellantis on Monday halted construction at its $3.7 billion electric-vehicle battery plant in Canada, which is being built in partnership with South Korea's LG Energy Solution (LGES), saying Canada has not fulfilled their promises.

The new auto plant was announced in March last year, but tensions emerged when the United States passed the Inflation Reduction Act (IRA), a massive package of clean-tech incentives for companies.

Earlier this week, Canada's Industry Minister Francois-Philippe Champagne said the federal government has increased its planned support to Stellantis and that to break the "stalemate," it is important that Ontario "pay its fair share."

Canada's federal government argued that Ontario, where the battery plant is being built, should pay its share to resolve the dispute. Initially, Ford resisted the idea of his province spending more money on the project. Nevertheless, on Friday, he agreed to allocate more funds, though he declined to provide details.

"I will confirm...we’re putting more money on the table there," Ford told reporters.

"This is all about saving jobs and giving people the quality of life they deserve in southwestern Ontario," he added.

Shares of STLA are up 1.88% in afternoon trading on Friday.

By Michael Elkins | [email protected]

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