Stellantis to spend $3.6 billion upgrading Windsor, Brampton plants

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FILE - In this file photo taken on Jan. 19, 2021, the Stellantis sign is seen outside the Chrysler Technology Center, in Auburn Hills, Mich.  A joint venture between Stellantis and South Korea’s LG Energy Solution plans to build a large electric vehicle battery factory in Windsor, Ontario, employing about 2,500 people. It’s expected to open early in 2024 and will be able to make battery cells and modules for over 500,000 electric vehicles per year.   (AP Photo/Carlos Osorio, File)
Stellantis said it will spend billions to retool its two Ontario plants to produce electric and hybrid vehicles. (AP Photo/Carlos Osorio, File)

Stellantis will spend billions retooling its two Ontario plants to produce battery electric and hybrids vehicles, the company announced Monday, with the federal and provincial governments pitching in more than $1 billion.

The automaker says it will invest $3.6 billion to upgrade its plants in Windsor and Brampton with flexible vehicle platforms to allow both facilities to produce battery electric, hybrid and gas-powered vehicles.

The upgrades come as the company pursues an electrification strategy that aims to see battery electric vehicles make up 53 per cent of the company's North American sales by 2030. Retooling at the Windsor plant, which currently produces Chrysler-brand minivans, will start next year. The Brampton facility, which makes the Chrysler 300 and Dodge Charger and Challenger vehicles, will begin in 2024.

While Stellantis did not announce which vehicles will be manufactured at the plants, the company says both facilities will require three shifts to support production. The Windsor and Brampton plants currently operate on two shifts.

Stellantis will also expand its existing Automotive Research and Development Centre (ARDC) in Windsor, adding 650 new jobs focused on supporting the company's electrification efforts. The automaker will also build a battery lab at the ARDC, making it the company's first one in North America.

Stellantis will receive financial assistance from both the federal and Ontario governments. Canada will invest up to $529 million towards the upgrade, while the province has committed up to $513 million.

“These investments re-affirm our long-term commitment to Canada and represent an important step as we move toward zero-emission vehicles that deliver on our customers’ desire for innovative, clean, safe and affordable mobility,” Mark Stewart, Stellantis' chief operating officer for North America, said in a statement.

Prime Minister Justin Trudeau, Ontario Premier Doug Ford, federal Innovation Minister François-Philippe Champagne, Ontario Economic Development Minister Vic Fedeli and Windsor Mayor Drew Dilkens were also on hand for the announcement.

"(We're) investing in this multi-billion dollar project because it will deliver. It'll deliver for our workers, it'll deliver for communities, it'll deliver for our economy and it'll deliver for the environment," Trudeau said.

Ford says the investment is one of many that will transform Ontario's automotive industry from being "on the ropes" to becoming a leading jurisdiction for the production and development of electric vehicles.

"We know we can and should build the vehicle of the future right here in Ontario," Ford said.

"We have the expertise, we have the best workers anywhere on this planet, we have the critical minerals needed to power the electric vehicle revolution. Now, we have the competitive business environment needed to attract game-changing global investment to the province."

Monday's announcement marks the latest in a string of investment made by automakers, with help from the federal and Ontario governments, related to electric vehicle productions in Canada.

Last month, GM announced it will spend $2 billion to launch its first electric vehicle production line at its CAMI plant in Ingersoll, Ont., as well as add additional light-duty Chevy Silverado pickup production at its facility in Oshawa, Ont. The federal and provincial governments are providing $259 million each to the project.

In March, Stellantis announced it would form a joint venture with South Korean battery giant LG Energy Solutions to establish a new lithium-ion battery manufacturing plant in Windsor.

Honda Canada will spend $1.38 billion to upgrade its Allison, Ont. plant to produce the 2023 CR-V hybrid crossover vehicle, with the federal and provincial governments pitching in $131.6 million each toward the plant upgrade.

General Motors and South Korea's Posco Chemical announced earlier in March that the companies will invest $400 million to build a new facility in Quebec to produce cathode active materials to power GM's electric vehicles.

Ford also said it will invest $1.8 billion to retool its Oakville assembly plant to build battery electric vehicles.

Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.

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