Stellantis Divests from Ontario Battery Facility Amid EV Strategy Shift

Car manufacturer Stellantis is offloading its 49 percent stake in an Ontario battery facility to its partner LG Energy Solution for a nominal fee of US$100, as the company embarks on a significant overhaul of its electric vehicle plans.

This agreement will grant LG full control over the $5 billion Next Star Energy plant located in Windsor, a development that provincial and federal governments supporting the project indicated was likely favorable.

The decision follows Stellantis incurring an approximate $36 billion (22.2 billion euro) charge tied to electric vehicle investments.

Stellantis CEO Antonio Filosa mentioned during an analyst call on Friday that the company is “dramatically” changing its relationships with suppliers, government bodies, and other stakeholders as part of a “decisive reset” for the firm.

“We are resetting our product plan and our EV supply chain, to reflect much more real customer demand and shifting regulation, following an initial overestimation of pace of adoption of electrification.”

This retreat coincides with U. S. President Donald Trump rolling back regulations and generous incentives aimed at hastening the shift towards electric vehicles.

LG Energy Solution’s CEO David Kim expressed that the company still sees growth potential in North America by establishing a key production center in Canada.

“Full ownership of Next Star Energy will enable us to respond swiftly to the growing demand from the (electrical energy storage) market and position us to play a key role in Canada’s EV industry,” Kim stated.

In light of rapid changes within the EV landscape, Next Star has decided to postpone vehicle battery production and pivot towards manufacturing batteries for energy storage instead.

Next Star Energy was formed as a joint venture between both companies in 2022, later securing potential production incentives amounting to $15 billion from both provincial and federal governments.

LG revealed its minimal purchase price for Stellantis’ stake in a regulatory filing where it also noted that Stellantis had previously invested US$980 million into the plant.

Currently, this project employs over 1,300 individuals with aspirations to expand that number to 2,500 as it reaches full production capacity.

Ontario Premier Doug Ford played down any major repercussions stemming from Stellantis’ decision.

“Stellantis is making a financial decision. They’re still going to use their batteries for their vehicles,” Ford remarked.

“I think it was a good business decision, to be frank with you,” he added.

Federal Industry Minister Mélanie Joly pointed out that ongoing investment from South Korea’s LG is encouraging and aligns with efforts aimed at strengthening trade relations.

“It’s good news for LG to anchor itself even more in Windsor. Last week we signed a partnership with Korea on advanced manufacturing and the auto sector.”

Jennifer Cunliffe , A SPOKESPERSON FOR ONTARIO ECONOMIC DEVELOPMENT MINISTER VICTOR FEDELI , STATED THAT LG IS WELL-POSITIONED TO TAKE THE LEAD ON THE PLANT.

“THE NEXTSTAR FACILITY WILL CONTINUE TO PRODUCE BATTERIES FOR ENERGY STORAGE SYSTEMS AND FOR EVS AS THEY BROADEN THEIR CUSTOMER BASE AND SUPPORT LONG-TERM GROWTH IN THE WINDSOR REGION ,” CUNLIFFE SAID IN A STATEMENT.

“AS WITH ALL OF OUR INVESTMENTS , ONTARIO HAS CLEAR , AND STRONG , GUARDRAILS IN PLACE TO ENSURE THAT PROVINCIAL FUNDING IS ONLY DISBURSED WHEN SPECIFIC PROJECT MILESTONES AND JOB CREATION TARGETS ARE MET.”

THE PROVINCE SAID FEDELI ON FRIDAY MORNING SPOKE WITH TREVOR LONGLY , PRESIDENT OF STELLANTIS CANADA , WHO REAFFIRMED THE COMPANY’S COMMITMENT TO ITS OPERATIONS AND PRESENCE IN ONTARIO.

THE COMPANIES SAID STELLANTIS REMAINS A COMMITTED CUSTOMER AND WILL CONTINUE TO SOURCE BATTERY PRODUCTS FROM NEXTSTAR ENERGY.

“THIS IS A SMART , STRATEGIC STEP THAT SUPPORTS OUR CUSTOMERS , OUR CANADIAN OPERATIONS , AND OUR GLOBAL ELECTRIFICATION ROAD MAP,” FILOSA SAID IN A STATEMENT.

THIS DECISION SAYS LESS ABOUT ONTARIO MANUFACTURING THAN IT DOES ABOUT THE AUTOMAKER , SAID BRENDAN SWEENEY , MANAGING DIRECTOR OF THE TRILLIUM NETWORK FOR ADVANCED MANUFACTURING.

“THIS IS MUCH MORE ABOUT THE FUTURE DIRECTION OF STELLANTIS THAN IT IS ABOUT THE AUTOMOTIVE INDUSTRY BROADLY,” HE NOTED.

HE ADDED THAT IT ALSO REFLECTS A LONGER-TERM TREND HIGHLIGHTED BY THE TRILLIUM NETWORK EARLIER THIS WEEK – U. S. AUTOMAKERS GRADUALLY PULLING BACK FROM CANADIAN PRODUCTION WHILE JAPANESE AUTOMAKERS MAINTAINED A STEADIER FOOTPRINT.

SWEENEY POINTED OUT THAT LGS COMMITMENT OFFERS HOPE FOR ALTERNATIVES TO DETROIT THREE.” L G IS IN A BETTER POSITION TO RUN A BATTERY PLANT THAN STELLANTIS IS SO MAYBE THIS IS GOOD NEWS ,” HE ADDED.” PUBLICATION DATE = ”FEBRUARY 6 ; 2026”, WENT LIVE FIRST BY CANADA PRESS”. OTHER U. S. A AUTOMAKERS HAVE BEEN FACING CHALLENGES DUE TO AMERICAN EV POLICY CHANGES; FORD MOTOR CO. REPORTED $19.5 BILLION LOSS LAST DECEMBER WHILE GENERAL MOTORS ANNOUNCED $6 BILLION SHORTAGE LAST JANUARY BOTH RELATED E VEHICLES. SWEENE Y INDICATED THERE’S AN INCREASING UNDERSTANDING THAT REGULATOR-SET TIMELINES WEREN’T REALISTIC BUT BELIEVES MARKET DEMAND WILL KEEP RISING. PRIME MINISTER MARK CARNEY ANNOUNCED THURSDAY THAT FEDERAL GOVERNMENT WILL BE ABANDONING ITS EV MANDATES IN FAVOR OF TIGHTER EMISSIONS REQUIREMENTS FOR AUTO SECTOR WHILE ALSO REVIVING AN EV REBATE PROGRAM. CARNEY NOTED GOVERNMENT PLANS CONSULTATIONS AIMED AT BOOSTING EXISTING PROGRAM PROVIDING INCENTIVES TO AUTOMAKERS WHO MAINTAIN THEIR CANADIAN PRESENCE THROUGH LOWER TARIFFS APPLIED TO IMPORT VEHICLES FROM UNITED STATES. carney pointed out goals include EXPANDING PROGRAM INTO TRADABLE SYSTEM AWARDING CREDITS PRODUCERS INVESTING CANADA AND REQUIRING NON-COMPLIANT PARTIES PURCHASE CREDITAVOID TARIFFS. THESE INITIATIVES INCLUDING $3 BILLION FUND ARE DESIGNED TRANSFORM CANADA’S AUTO SECTOR INTO WORLD LEADER ELECTRIC VEHICLE SPACE ACCORDANCE CARNEY. CARNEY DECLARED ‘THE FUTURE AUTO INDUSTRYNOW MORE ELECTRIC.’ STORY ORIGINALLY WRITTEN BY KANADIEN PRESS WAS RELEASED FEBRUARY 6 ;2026. – WITH CONTRIBUTIONS LIAM CASE Y TORONTO IAN BICKIS, KANADIEN PRESS

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