By Kim Seung-yeon
SEOUL, May 16 (Yonhap) -- LG Energy Solution Ltd. (LGES) said Tuesday the construction of an electric vehicle (EV) battery plant in Canada with Stellantis N.V. has been halted, amid apparent haggling between the Canadian federal and provincial governments over who should pay more incentives.
The announcement confirms earlier reports by foreign media outlets on the suspension of what will be a more than 4.8 trillion won (US$3.6 billion) joint venture between the world's second-largest battery producer and No. 4 automaker to build an EV battery manufacturing facility in Ontario by the first half of 2024.
LGES and Stellantis launched their joint venture in March last year, aiming to have an annual production capacity of 45 gigawatt hours from the envisioned plant.
"As of today, the Canadian government has not delivered on what was agreed to, therefore Stellantis and LG Energy Solution will begin implementing their contingency plans," LGES said in a statement.
"Effective immediately, all construction related to battery module production on the Windsor site has stopped," it said.
An LGES official said the construction of the battery cell plant is ongoing, but also did not rule out discontinuing the work there should the negotiations with the Canadian government make no headway.
The Canadian federal government has claimed the Ontario government should pay its fair share of the pledged incentives, while the Ontario government insists it is the federal government that needs to step up its support for the project.
While the companies have not disclosed their exact shares in the investment, Canada has promised to provide incentives worth about C$1 billion (US$743 million), according to industry sources.
The output from the Ontario plant, once completed, was going to be supplied to Stellantis assembly plants in the area that manufacture its famous brands, such as Chrysler and Jeep SUVs.
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