Stellantis CEO says Canada could be the location of its new electric-vehicle battery plant

The head of Stellantis NV says Canada could be the location of its new electric-vehicle battery plant, part of the global automaker’s €30-billion investment in emissions-free cars.

Stellantis, formed in January by the merger of Fiat Chrysler Automobiles and PSA Group of France, will build two battery plants in North America and three in Europe – Germany, France and possibly Italy.

Carlos Tavares, Stellantis’s chief executive officer, said the locations of the North American plants have not been selected, and are under discussion with partners and government officials. “At least one will be in the U.S., perhaps two. There is also an option that one of the two will be in Canada,” Mr. Tavares told a news conference of Detroit’s Automotive Press Association on Wednesday.

Talks between the Amsterdam-based company and the federal government are under way about a plant in Ontario or Quebec, but a specific location has not been discussed, said a source familiar with the matter whom The Globe is not naming because they are not authorized to speak publicly on the negotiations.

A spokeswoman for Stellantis in Canada declined to elaborate on Mr. Tavares’s comments.

The world’s carmakers are scrambling to secure supplies of batteries and their components – mainly lithium – as they revamp their lineups to include more electric and hybrid vehicles.

Ontario and Quebec have plenty of the raw materials that go into batteries – lithium, nickel, cobalt and graphite – but not the processing capacity to make the batteries, said Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, which represents the Canadian industry. A manufacturer that sourced the batteries in Canada would meet the requirement of the North American free-trade deal’s country-of-origin requirements, Mr. Volpe said. “It makes a lot of sense for a battery plant to be on this side of the border,” Mr. Volpe said.

Stellantis makes 110 models under several brands, including Jeep, Peugeot, Chrysler and Dodge and Fiat. In Ontario, Stellantis employs 9,700 people at factories in Brampton, Windsor and Toronto.

Mr. Tavares said by 2030 that 70 per cent of Stellantis sales in Europe will be emissions-free cars. In North America, this number will be 40 per cent, as the company begins making electric Jeeps, Ram trucks and Dodge Chargers and Challengers, the muscle car currently produced in Brampton.

In Canada, the government has said by 2035 all light vehicles sold must be emissions-free.

Demand for electric cars could surpass the company’s forecasts if public opinion and government regulations drive the shift away from vehicles powered by internal combustion engines, Mr. Tavares said.

“I think there is a lot of room for acceleration,” he said. “It depends a lot of course on the regulations, on the public opinion. It depends on how the public opinion and the consumers and the citizens will react to the weather events that we are now facing in many areas of the world. You saw that in Europe over the last few days - there was significant flooding in Germany in Belgium and Austria. This has an impact on the public opinion.”

The battery plants will be built by a Stellantis-TotalEnergies joint venture called Automotive Cells Co., which develops and produces the power plants. The planned Italian battery plant will cost a reported US$1.8-bilion.

“It’s as big an investment as you’re going to get in the automaking space,” Mr. Volpe said. “Other than an assembly plant, a battery plant is going to be the biggest investment.”

Stellantis’s predecessor company, FCA Canada, in 2020 said it would spend as much as $1.5-bilion to retool its Windsor minivan plant to make plug-in and hybrid electric vehicles by 2024, adding 2,000 jobs. However, Stellantis has not said if the Brampton plant will make the electric versions of the Dodge Chargers and Challengers, which are slated to launch in 2024.