Stellantis, NextStar’s principal customer for automotive battery cells, has scaled back the pace of its electric-vehicle rollout in the region. Industry analysts attribute the softer outlook in part to the withdrawal, at the end of September, of certain U.S. tax incentives introduced under the Inflation Reduction Act. The program had offered purchasers of qualifying electric models a federal credit, but eligibility rules have tightened, reducing the number of vehicles that meet the criteria.
On the trade front, Canada has not secured new agreements to bolster automotive exports to its largest market, the United States. Tensions surfaced recently when the federal government initiated a formal dispute-resolution process after Stellantis opted to transfer future Jeep Compass production from Brampton, Ontario, to a plant in Illinois. While the case is separate from battery manufacturing, it underscores uncertainties that can influence investment decisions.
NextStar stated that LFP chemistry meets a range of technical requirements for stationary storage, including durability and thermal stability, while offering cost advantages over nickel-based alternatives. The company emphasized that the added product line is intended to capture emerging opportunities without reducing support for automotive clients.
Preparations for the transition have already begun. Engineers are conducting material validation, equipment calibration and trial runs on the modified assembly lines. According to the company, the initial phase of LFP mass production is expected to reach commercial volume “in the coming weeks,” although no specific output figures were provided.
Chief Executive Officer Danies Lee said the adjustment demonstrates the venture’s ability to react to market signals and maintain manufacturing flexibility. He signaled that the shift will help secure long-term employment at the Windsor complex, which has been positioned as a cornerstone of Canada’s battery-supply ambitions.
The move also reflects a broader industry trend. Research groups anticipate double-digit annual growth for grid-scale storage through the next decade as utilities add renewable generation and seek to balance intermittent supply. Further background on global storage deployments can be found through resources such as the International Energy Agency’s overview of battery technologies (IEA).
Within the factory, LFP and NMC production will share some processes, while certain stages—such as electrode formulation and cell formation—require dedicated lines to accommodate differences in chemistry. NextStar did not disclose investment figures for the conversion but noted that most core infrastructure, including the dry rooms and formation equipment, can be adapted rather than replaced, allowing the project to proceed on an accelerated timeline.
The joint venture was announced in 2022 as part of a broader push by Stellantis to localize battery manufacturing in North America. LG Energy Solution supplies expertise in cell design and process engineering, while Stellantis provides the principal offtake for automobile applications. With the inclusion of ESS-focused output, the partnership aims to address multiple segments of the battery market from a single campus.
No workforce reductions are planned as a result of the change. Instead, NextStar expects to retrain portions of its staff to operate the new lines. The company did not comment on potential future expansions but indicated that it will continue to monitor demand patterns in both mobility and stationary sectors.
Crédito da imagem: Just Auto / GlobalData
