Stellantis is preparing to announce a $2.54-billion deal to retool its Canadian operations as part of a shift towards electric and hybrid vehicles, The Logic has learned. The deal includes plans to upgrade its auto assembly plant in Windsor, Ont. and new spending on its other Ontario facilities.

The announcement—expected early next week, according to a source—will mark the latest in a string of major investments in the future of the Canadian automotive industry. Automakers including Ford, Honda and GM have laid out multibillion-dollar plans to produce EVs and hybrids, while governments have committed billions in taxpayer dollars to encourage the transformation, arguing Canada risks being left behind without support for the sector from the public purse.

According to a document obtained by The Logic, The Ontario government will contribute up to $380.8 million as part of the deal in exchange for assurances that Stellantis will retain a specified number of employees at its main facilities in the province. 

In a response to questions, Stellantis spokesperson LouAnn Gosselin said the company had “nothing to announce at this time.”

But in a statement, Ontario Economic Development Minister Vic Fedeli said the company’s forthcoming investment is a direct result of the government’s ongoing efforts to secure major investments. 

“Our government reduced the cost of doing business in Ontario by $7 billion a year to make our province an attractive jurisdiction for auto companies to make the historic investments needed to revolutionize the sector,” he said. 

An official representing Innovation Minister François-Philippe Champagne did not respond to questions about whether the federal government is also putting money towards the deal.

According to the document, Stellantis—the world’s sixth-largest automaker, with brands including Chrysler, Fiat, Dodge and Jeep—will retool its Windsor Assembly Plant, where it currently manufactures the Chrysler Pacifica, Voyager and Grand Caravan minivans, at a cost of $1.9 billion, $285 million of which will come from the province. A new “flexible” assembly line will let the facility produce battery-powered electric vehicles, hybrids and gas-fuelled vehicles.

The company, whose Canadian operations are run by FCA Canada, had previously said it would spend around $1.5 billion to retool its Windsor facility and transition toward EVs, even as it has cut shifts in recent years amid a global semiconductor shortage. 

Government officials would not confirm what specific EV or hybrid models the Windsor plant would manufacture.

The document says the company will create an “Electric Vehicle Centre of Competency” at its Windsor research and development facility with a focus on EV technology and product development. Ontario is contributing $55 million of its $364-million price tag. It will also launch a similar centre for battery pack testing at a cost of $262 million, $39 million of which is coming from the province.

The deal will see $7.1 million spent upgrading equipment at Stellantis’s Brampton facility, where it currently manufactures the Chrysler 300, Dodge Charger and Dodge Challenger, and $9.1 million for equipment upgrades at its Etobicoke casting plant. 

It will be Stellantis’s second big announcement in Ontario this year. In March, the company and South Korean partner LG announced plans to build a roughly $5-billion battery facility in Windsor to supply its future electric-vehicle production. The Logic was first to report LG’s $2-billion contribution to the battery facility.

Stellantis hopes electric vehicles will make up half its U.S. sales by the end of the decade, according to its latest strategic outlook.

Next week’s announcement follows several other recent EV-linked investments in Canada’s auto sector, including GM’s $2-billion plan to convert its Ingersoll, Ont., plant to produce electric vans and expand production of the gas-powered Chevrolet Silverado at its Oshawa, Ont., plant. As The Logic first reported, Honda plans to spend $1.4 billion converting its Canadian facilities to hybrid production, while Ford has said it will recalibrate its Oakville, Ont., plant to manufacture EVs.