Stellantis and Samsung Intend to Construct a Second EV Battery Plant in Kokomo, Indiana

Stellantis and Samsung intend to construct a second EV battery plant in Kokomo, Indiana. Some current Stellantis employees in the area view these plants as a potential threat to their existing jobs.

Stellantis and Samsung Intend to Construct a Second EV Battery Plant in Kokomo, Indiana
Stellantis and Samsung Intend to Construct a Second EV Battery Plant in Kokomo, Indiana

Traditional automakers are relying on EV battery plants to facilitate their shift from gasoline-powered to electric vehicles in the future. However, these plants could pose a threat to current jobs related to building engines and transmissions, which are not required in EVs. Stellantis alone operates four plants in Kokomo, employing over 5,000 hourly workers, specifically engaged in engine and transmission production.

Stellantis and Samsung Intend to Construct a Second EV Battery Plant in Kokomo, Indiana

The Brand Stellanis, known for manufacturing vehicles under brands like Jeep, Ram, Dodge, and Chrysler, is currently facing a four-week strike led by the United Auto Workers union. The strike revolves around the key concern of job prospects in the electric vehicle (EV) manufacturing sector, and this issue also affects its unionized competitors, General Motors and Ford.

Although the four Kokomo plants are not currently striking, the United Auto Workers union is conducting a strike at Stellantis’ assembly complex in Toledo, Ohio, as well as at 20 parts and distribution centers spanning across 14 states.

Automakers are actively constructing EV battery plants in partnership with battery manufacturers, like Samsung, to operate these facilities. They have been adamant that employees at these plants will be employed by the joint ventures, rather than the automakers themselves. It’s worth noting that the wages at recently opened US EV battery plants are significantly lower than what UAW members typically receive when employed by the automakers.

On Friday, UAW President Shawn Fain announced that GM had accepted a crucial union demand, ensuring that employees at its EV battery plants will be included in the company’s national master labor agreement with the UAW. While GM has not officially confirmed this agreement, specifics about the workers’ compensation and whether they will be GM employees or classified under separate companies remain undisclosed.

Fain celebrated this agreement as a significant victory for the union and emphasized that they would now urge Ford and Stellantis to adopt similar terms if they wish to conclude the strike.

Samsung and Stellantis Jointly Declared Their Intentions to Allocate Billions to Construct The New Plant

Following this development, Samsung and Stellantis have unveiled their intentions for a new battery plant. They jointly declared on Wednesday that they will allocate over $3.2 billion to construct the new facility, scheduled to commence operations in early 2027, with an annual capacity of 34 gigawatt hours. The establishment of this plant will result in the creation of approximately 1,400 new positions in Kokomo, which is situated about an hour north of Indianapolis.

StarPlus Energy, a collaborative effort between Samsung and Stellantis, had previously selected Kokomo as the location for its inaugural gigafactory. This facility is presently in the construction phase and is projected to commence operations in 2025.

Collectively, the two facilities will generate an annual production capacity of 67 gigawatt hours. Indiana Governor Eric Holcomb expressed, “Indiana’s economy is thriving,” in a press release, emphasizing that the addition of the second plant represents a doubling of both capital investment and the number of new jobs being generated.

These factories will aid Stellantis in achieving its objectives of having battery electric passenger cars comprise 100% of European sales and 50% of US sales by 2030. Stellantis had previously revealed a substantial $35 billion investment for electric vehicle production in 2021 and requires an annual capacity of 400 gigawatt hours to fulfill its 2030 targets.

Stellantis came into existence in 2021 as a result of the merger between Fiat Chrysler and PSA Group, which manufactures Peugeot, Citroën, Opel, and Vauxhall vehicles in Europe. Pre-market trading saw shares increase by nearly 2%.

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