Stellantis to announce second North American battery plant in Kokomo, Indiana

Jeep maker Stellantis NV is expected to announce plans Tuesday to locate its second North American electric-vehicle battery manufacturing plant in Kokomo, Indiana, three sources familiar with the situation told The Detroit News, beating out two sites in Michigan.

The investment would mean Michigan has failed to win any battery plants from the transatlantic automaker's first round of gigafactory investments. An automotive gold rush for megasites making EVs, batteries and related parts has fueled announcements mostly in states and provinces other than the home of the city that put America on wheels — even from its hometown automakers.

Stellantis NV has selected Kokomo, Indiana, for the site of its second battery plant in North America, three sources told The Detroit News.

The looming Stellantis announcement comes ahead of the Detroit Regional Chamber's annual Mackinac Policy Conference next week and during a pivotal election year in Michigan as Gov. Gretchen Whitmer’s administration has prioritized economic development. Michigan claims about a quarter of the nation's engine production and its associated employment, which is at risk as automakers exit internal-combustion engines to go zero-emission.

Stellantis' selection of Kokomo because it offered more flexibility, among other things, follows the automaker's announcement in March of its first North American battery plant in Windsor, Ontario, in a joint venture with LG Energy Solution.

In January, General Motors Co. said it will construct a battery plant in Delta Township outside of Lansing with LG Energy Solution, but that was after the Detroit automaker announced two other plants in Ohio and Tennessee and Ford Motor Co. said it was making an $11.4 billion investment for an EV assembly plant and three battery plants with partner SK Innovation Co. Ltd. in Tennessee and Kentucky.

A bipartisan effort between Whitmer and GOP lawmakers led to a new incentive program to lure the GM project. Embarrassed by Ford's move down south, Michigan created the "Strategic Outreach and Attraction Reserve," or SOAR, a $1 billion incentive fund to help speed closure of a multibillion-dollar investment deal with GM,

Whitmer and legislators have been pushing to win more large-scale manufacturing projects and invest additional state funds in incentives, hoping to stake Michigan’s claim to the future of the auto industry. LG Energy Solution in March said it will quintuple its capacity at its existing plant in Holland, but It’s unclear whether the governor will be able to score additional developments ahead of the November election.

The Democratic governor has a pending request before the Republican-controlled Legislature for $500 million for cash grants to help seal economic development deals and pay for infrastructure improvements to make sites shovel-ready. Lawmakers in December appropriated $1 billion toward a fund that the Whitmer administration used to award $666 million to GM and its battery partner for EV investments in Eaton and Oakland counties.

Meanwhile, a swath of mobility manufacturing announcements from foreign automakers and EV startups like Rivian Automotive Inc. have gone to southern states, including Georgia and North Carolina.

Mark Stewart, Stellantis' chief operating officer for North America, had said the company home to the Chrysler, Dodge and Ram brands was expected to announce a second gigafactory with Korean battery manufacturer Samsung SDI in the United States in the coming weeks after making two multi-billion-dollar investments in Windsor.

A media advisory sent on Monday announces "an update on the future of its Kokomo operations" will be made at 1 p.m. on Tuesday in Kokomo at Ivy Tech Community College's Hingst Hall. The community with nearly 60,000 residents has Stellantis transmission, casting and engine plants, including where it recently invested $400 million to repurpose the idled, former Indiana Transmission Plant II to build engines.

Stellantis previously said with Samsung their joint-venture battery plant was expected to launch production in 2025 to supply batteries for electrified vehicles in North America. The lithium-ion battery plant would have an initial annual capacity of 23 gigawatt hours with the ability to increase that to 40 gigawatt hours in the future.

That's smaller than the gigafactory Stellantis announced for Windsor with LG Energy Solution. That $4.1 billion plant's annual capacity is expected to be more than 45 gigawatt hours and launch in the first quarter of 2024, supplying 2,500 new jobs.

Kokomo beat out Monroe County's Dundee, where Stellantis has a 1.3-million-square-foot engine plant, according to two of the sources who declined to be identified because the announcement is not yet public. A roughly 400-acre site in Marshall also was considered. Locations in Wayne County were presented, but properties near Belleville and Trenton were deemed too small.

Stellantis is investing $35.5 billion into electrification and software by 2025. It says it will have around 400 gigawatt hours of annual capacity by 2030 across five gigafactories, including three in Europe and the two in North America. By then, it expects more than half of its U.S. sales will be all-electric.

Although for now, Stellantis isn't building batteries in Michigan, it's updated plants in Detroit and Warren to manufacture in the future plug-in hybrids and battery electric vehicles. Generally, startups and legacy automakers are expected to add more battery and EV-related projects in the coming months.

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Staff Writer Craig Mauger contributed.