NextStar Energy says Windsor’s battery complex will add energy‑storage cells this month, an early sign Canada’s EV buildout is tilting toward grid demand as retail momentum cools. The move follows a year when federal purchase incentives wound down and buyers leaned harder into hybrids, leaving battery makers to chase steadier orders from utilities and commercial projects.
S&P Global Mobility estimates zero‑emission vehicles captured 9.2 percent of Canadian new‑vehicle registrations in the second quarter of 2025, down from late‑2024 peaks as higher rates and affordability bit into demand. The production shift matters for supply chains tied to LG Energy Solution, and Ontario’s power build.
ESS Push Changes Plant Economics
NextStar received an occupancy permit on September 30, marking construction completion and clearing the way to ramp cell output at a site scaled for up to 49.5 gigawatt‑hours a year. The expansion into energy storage adds lithium iron phosphate chemistry alongside existing nickel manganese cobalt lines, a pairing aimed at price stability and durability for stationary uses.
Global peers are making similar calls as grid projects outpace EV growth, with SK On retooling lines for dedicated storage batteries to mitigate softer car demand.
“This achievement is the direct result of a shared vision, effective partnership, and incredible hard work of everyone involved,” said Danies Lee, pointing to the transition from construction to operations.
Taken together, the shift can smooth plant utilization and diversify order books in a period when consumer EV uptake is choppy.
Policy Backdrop Keeps Moving
Ottawa’s Incentives for Zero‑Emission Vehicles program ended early in January when funds were fully committed, closing a six‑year run that supported more than half a million purchases. “The iZEV Program has been a huge success,” Transport Canada said, while noting medium and heavy‑duty incentives remain available subject to funding.
The regulatory lane is shifting too, as the federal government waived the 20 percent zero‑emission sales requirement for the 2026 model year, easing near‑term compliance while longer‑dated targets remain on the books.
For automakers and their Canadian suppliers, that means fewer policy pulls in the next 18 months and more pressure to prove lifetime value to buyers and fleet managers. As the retail mix skews toward hybrids and provincial gaps persist, storage demand tied to new generation, data centres, and local reliability could become the steadier anchor for Windsor’s first‑of‑kind plant.
The Windsor pivot is less about a single model cycle and more about load‑balancing the investment case. Utilities, independent power producers, and grid‑equipment players are pushing storage to firm up renewables, manage peak pricing, and ride the electrification wave.
That creates a clearer path for multi‑year offtake agreements that reduce volume volatility for Canadian battery manufacturing. Retail EV headwinds remain, and share may bounce with rate cuts or new models, yet capacity that can swing between packs for vehicles and cabinets for substations gives operators optionality.
For TSX watchers, the lesson is straightforward: revenue tied to electrons sold and stored could matter as much as vehicles sold in the next quarter.
