The country’s first EV battery plant in Windsor, Ont., is almost ready to roll — and a lot is rising on its success or failure
Rob Kennedy tried something different after a 40-year career in Ontario’s auto sector: he headed back to the classroom.
All summer long, the 59-year-old spent evenings and weekends working towards a 375-hour battery manufacturing certificate at St. Clair College in Windsor, burying himself in chemistry, math and other topics in hopes of landing a position at the country’s first battery cell manufacturing plant.
“It’s not easy for a guy who hasn’t been in school for 42 years to go to math and start algebra,” he said. “But I’m telling you, it’s exciting.”
“Electrification, we know, is going to be the future,” Windsor Mayor Drew Dilkens said.
At the root, any debate comes down to whether using taxpayer money to entice the project’s owners to set up shop will end up as a boon for the auto industry or a boondoggle for Canada.
Dilkens said the battery project has been nothing less than a “rebirth” for Windsor and the auto sector and cites the fast pace of construction as a sign of how different levels of government can work together to reduce regulatory burden and grow the economy.
For example, he said the province issued a rezoning order that saved at least four months to six months on the length of the project.
“(NextStar) told us to get ready for the supply chain that follows behind us,” Dilkens said, suggesting it has already started happening.
Kennedy said he was working for an auto-parts company in sequencing — organizing vehicle parts with labels so that workers can easily identify and assemble them — when the plant suddenly closed in 2022 as a result of insourcing, meaning the company’s customer decided to handle the job itself.
Since then, he’s found work as the director of a union-led action centre that helps laid-off auto workers find employment.
But Kennedy said a change has washed over the city of 233,000 people since March 2022, when NextStar announced it would build a battery plant there.
“This is the most invigorating thing we can have happen to the city,” he said. “I have seen individuals come in, 47 years old, so not that old, but scared to death because they have to make a resumé.”
He’s expecting a sea change in what kind of work building batteries will entail compared to work on internal combustion engine vehicles.
“We just know bits and pieces,” Kennedy said. “I’ve heard there’s going to be no manual labour involved; no one’s going to be touching batteries.
Inside the battery module plant, robotic arms and computers are completely enclosed behind plexiglass. In the dust-free, climate-controlled environment, workers are expected to keep special footwear onsite that never goes outside. The dominant sound is an ambient whir of cooling fans as workers quietly glide around the floor, reading data off computer screens behind glass.
Every day, NextStar is bringing in dozens of people for interviews in the office building it leased next to its planned battery cell campus, where it says an estimated 2,000 Canadian construction workers are currently onsite.
Delivery trucks ferrying industrial fans and other equipment line up at the security gates daily. Inside, the company estimates there are thousands of storage containers scattered around the 230-acre parcel of land. Dozens of pickup trucks, golf carts and cherry pickers swarm the site, while street sweepers make the rounds, spaying water to keep the dust at bay.
“I am 100 per cent dedicated to getting this plant up and running,” Danies Lee, chief executive of NextStar, said.
Construction started in November 2022 and NextStar has said its battery module plant will begin production this fall — likely in the coming weeks.
The far larger battery cell manufacturing plant — where anodes, cathodes and electrolytes are assembled into cells — is still under construction, with production slated for 2025. Until then, battery cells are being imported from an LG plant in Poland.
Nonetheless, the plant’s construction timeline means it may begin production just as EV exuberance wanes. In September, Fitch analysts said that slower-than-expected EV sales mean Canada is “even less likely” to meet federal targets of EVs accounting for 100 per cent of light vehicle sales by 2035.
“We now forecast the total EV fleet to account for 12 per cent of total vehicle sales by the end of our forecast period in 2033, which is down from our previous forecast of 14 per cent,” Fitch analysts said in a note.
Lee, however, said he’s not worried about having too much capacity at the plant or even about a slowdown in EV sales.
“There’s no question about this market,” he said. “We expect it soon to be exponential growth.”
But Lee uses the word “chasm” to describe the journey his company will face between now and when EV penetration reaches much higher numbers, eventually accounting for all sales.
Not every EV battery manufacturer will cross “the chasm” and make it the other side, he said, pointing to challenges such as a lack of charging infrastructure and the high cost of EVs.
“It’s a matter of how slower it will be,” Lee said, “but still, that’s a big challenge.”
On the bright side, he said the slowdown could bring “a healthy adjustment” to the marketplace and weed out less-proven companies.
There is also the looming question of whether North American companies will be able to compete with Chinese EV makers, which are already producing at scale.
Lee said Chinese EV makers will present challenges, but struck a circumspect tone, saying the most dominant battery companies operating around the world so far hail from Japan and Korea — not China.
He hails from NextStar’s parent company, LG Chem Ltd., one of the largest companies in the world, with a background in sales and marketing and a previous stint in Silicon Valley.
Chinese companies, he said, still need to prove they can manufacture and sell EVs outside China and succeed.
“There is no single case where they proved their relevance in the rest of the world yet,” Lee said. “When you play home game versus away game, it’s a totally different story.”
A similar sentiment was echoed by Dilkens, who said he has visited Chinese EV factories.
“It’s interesting what they’re doing, and I think we have to watch them,” he said.
But Dilkens said he thinks rumours of $15,000 Chinese-made EVs are overhyped and would not meet Transport Canada’s safety standards.
“To get up to the Canadian standard, the price will naturally rise because the safety standards we require are very, very different,” he said.
The success or failure of the project in Windsor carries broad implications for Canada.
NextStar stands out as the biggest bet. In total, the federal government has committed to production subsidies that could amount to $12.2 billion, and Ontario has committed to $5.4 billion. Plus, both governments each agreed to kick in $500 million for construction.
The support doesn’t stop there, however.
The city of Windsor took on about $50 million in debt to acquire the property and to clear a house and move a drain and other debris so it could be prepped for NextStar, according to Dilkens. It then leased the property to NextStar for 99 years and forgave all property taxes for 20 years.
“I think Canada … (is) right in the short term to put the tariffs (on Chinese EVs) in place,” he said. “That gives us the ability to get this industry up and running to get a toehold.”
Almost from the beginning, however, there has been pushback about who will benefit from a project being advanced by two foreign companies.
“They will come here, get a taxpayer-funded paycheque and take it back to their country,” he said.
Tensions dissipated to some extent after NextStar said there was a miscommunication and that the actual number of temporary foreign workers was far less, currently only 80 people.
The company has defended its use of temporary foreign workers, saying that because this is the first battery plant being built in Canada — and one of the first in North America — all the equipment was custom fabricated in Asia, and the temporary foreign workers understand how to assemble it.
Inside NextStar’s battery plant, however, work continues apace. On a recent Friday afternoon, a half-dozen engineers wearing hard hats and holding clipboards huddled around a plexiglass battery module equipment line, fixed in concentration.
Two freshly minted engineers in their 20s who hail from the Windsor area and were hired by NextStar in the past 12 months said the battery plant has provided them with job opportunities in the city that they never expected would exist.
Kennedy, who has been through multiple layoffs and witnessed the ups and downs of the auto sector over multiple decades, said the battery plant feels like a new chapter.
“We’ve never seen this kind of plant, ever,” he said. “Maybe not since the 1980s.”