Greg Layson, Automotive News Canada
February 26, 2021
The southwestern Ontario city of Windsor, with the help of the federal and provincial governments, is in hot pursuit of a $2-billion electric-vehicle battery plant.
The Windsor-Essex Economic Development Corporation (WEEDC) this week submitted to the unnamed company a proposal aimed at securing a factory that would employ 2,000 people.
The Windsor Star was first to report the development.
WEEDC President Stephen MacKenzie said he is cautiously optimistic about his organization’s chances at convincing the company to set up shop in Windsor.
“There’s still a lot of work to do. There’s no guarantee we get this,” he warned Friday in a telephone interview.
Windsor is in competition with other cities from the United States, but none from Canada.
MacKenzie couldn’t name the company, but said the battery maker is already providing the components to automakers in another country. He also said the battery producer has signed four nondisclosure agreements with suppliers in Windsor. But, executives haven’t yet visited Windsor.
“There are a few stages to go, and no one is ever going to invest that kind of money without a tour and face-to-face meeting,” MacKenzie said.
An automaker isn’t involved in the talks, but the Ontario and federal governments are, he said.
Ontario Minister of Economic Development Vic Fedeli said the $6 billion Ford, GM and Stellantis have committed to electric-vehicle production in Ontario makes the province “an EV hub of the future.”
Ford says it will eventually build up to five EVs at its Oakville plant by 2026, while GM is already retooling its CAMI plant in Ingersoll to build electric commercial vans as early as November. Stellantis plans to increase hybrid production at its Windsor minivan factory, with at least one new model there by 2025. The investments stem from the latest round of contract negotiations with Unifor.
“They opened the door to make Ontario more attractive for these [battery] companies to locate here,” Fedeli said. “We’re in a very favourable place and it’s incumbent upon us to maximize that.
“We have have been actively meeting and pursuing electric vehicle battery makers on a global basis. We have been meeting with the mining companies.”
Ontario is rich such raw materials as has nickel, cobalt and lithium.
MacKenzie said the project would be built on a greenfield site and require 90 megawatts of electricity that comes from an electricity substation nearby.
But it’s the cost of electricity — Ontario has some of the highest rates in North America — that most concerns MacKenzie. Otherwise, “we have a very strong business case.”
Starting Jan. 1 the Ontario Electricity Rebate began providing eligible industrial consumers with a 21.2-per-cent rebate from the province on the subtotal of their electricity bill which will “result in electricity cost savings for industrial and large commercial consumers,” the province said.
MacKenzie said more needs to be done to lure investments of this magnitude. He’d like to see bigger corporate tax cuts for green companies, such as a battery maker; legislation that allows targeted exemptions for green investments or investments of a certain size or value.
Even with the high cost of electricity, Flavio Volpe, the president the Automotive Parts Manufacturers’ Association, calls Windsor “a no-brainer, from a logistics point of view.”
It’s midway between the mines of Northern Ontario and the auto factories of the Midwest United States. It will soon be home to four international crossings: The ageing Ambassador Bridge, the Detroit-Windsor Tunnel, a ferry and the Gordie Howe International Bridge, which is under construction.
“Canada has a leg up on the United States, and Ontario and Quebec have a leg up on any U.S. state, except perhaps Nevada from a chemistry point of view,” Volpe said. “Windsor’s one of the anchors in the supply chain corridor.”
David Adams, the head of the Global Automakers of Canada, which represents the Canadian interests of all but the Detroit Three, says there is a need for local battery production.
“I have been involved in several conversations lately around batteries and the necessity to have the processing space built out in Canada,” he said. “The raw materials are always touted but if we want battery development in Canada we need the processors and the final assembly.”
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