Windsor’s Auto Industry Faces an Existential Threat…But a Strategic Pivot Could Secure Its Future

The Looming Challenge: A Perfect Storm of Economic and Political Risk

The North American auto industry is standing at a crossroads. With the Trump-era tariffs scheduled to return April 2/2025 , ongoing trade volatility, and shifts in EV adoption, Canadian auto manufacturing…especially in Windsor…is at serious risk.

The Windsor Assembly Plant, a historic cornerstone of Canada’s auto sector, now faces uncertainty like never before.

The Very Real Threat to Windsor’s Auto Future

The warning signs are clear. Stellantis, like all major automakers, doesn’t make decisions based on loyalty…it makes them based on profitability and strategy. And right now, the strategic math for Windsor is getting harder to justify.

• Trump’s tariff threats could make Canadian-built vehicles significantly more expensive in the U.S. market, forcing Stellantis to reconsider production locations.
• Declining minivan sales (Pacifica, Grand Caravan) leave Windsor Assembly without a clear long-term volume driver.
• EV transition pressures mean automakers must decide which plants will lead and which will fall behind.
• Stellantis has already been cutting shifts at Windsor in response to shifting demand.
• NextStar, the EV battery plant in Windsor, is Canada’s biggest battery investment…but without a clear Stellantis EV to pair with, its long-term role isn’t secured.

The reality is harsh: if Windsor Assembly doesn’t become an essential part of Stellantis’ future EV strategy, it could be downsized…or worse, shuttered.

What Happens if Stellantis Doesn’t Adapt?

If Windsor isn’t repositioned as a critical EV hub, Stellantis has options…and none of them are good for Canada.

• Shift production to U.S. plants: Stellantis already operates multiple facilities that could take over Windsor’s output, especially if tariffs make Canadian manufacturing less competitive.
• Double down on European EV production: Stellantis has already made deep EV investments in France and Italy, where its brands like Peugeot, Citroën, and Fiat are headquartered.
• Scale back North American operations entirely: With the shift toward electrification, automakers are restructuring aggressively. If Windsor isn’t part of Stellantis’ new EV blueprint, it becomes expendable.

If Windsor loses its competitive edge, the ripple effects will be devastating:

• Thousands of lost jobs in auto manufacturing and supply chain industries
• Billions in economic impact erased from the Ontario economy
• A shrinking role for Canada in the global auto industry

The writing is on the wall…but Windsor has an opportunity to flip the script.

Reframing the Pieces: Why Windsor is Actually in a Prime Position

If we step back and look at the chessboard strategically, it becomes clear that Windsor is actually sitting on an incredible competitive advantage…if we move quickly to recognize it.

1. NextStar Energy: A World-Class Battery Plant in Windsor
   
   
• Stellantis and LG have already invested billions into making Windsor a battery hub, backed by significant financial support from both the federal and Ontario governments.
• Proximity advantage: NextStar is only 5 miles from Windsor Assembly, meaning a Stellantis EV built here would have the lowest logistics costs possible.
• Cost control: No need for long-haul battery transport, reducing expenses and increasing supply chain reliability.
2. Fleet Vehicles: The Underestimated Opportunity
   
   
• The fleet market is an overlooked, high-volume segment that fits perfectly into Windsor’s future.
• Fleet vehicles charge at centralized locations, solving EV infrastructure challenges that slow down retail adoption.
• Canada’s rental car, last-mile delivery, and government fleets are already shifting toward EVs…Windsor could supply them.
3. Government Policy is Already Moving in the Right Direction
   
   
• Canada has already mandated 100% zero-emission light-duty vehicle sales by 2035.
• Federal and provincial incentives exist for EV production and fleet adoption, making this a natural next step.
• Similar government-backed transitions have worked before, such as clean energy mandates and industrial emission caps.
4. Strategic Manufacturing Shift: EV Production Over ICE
   
   
• Stellantis already had plans to add new internal combustion engine (ICE) models to Windsor Assembly. These could instead be shifted to U.S. production facilities.
• This would free up Windsor to become a dedicated EV fleet production hub, securing its long-term role in North America’s auto industry.
• With a phased transition, Stellantis could start by electrifying the Pacifica and later introduce new commercial EV platforms as Windsor retools.

So instead of Windsor being on the defensive, why not go on the offensive?

A Simple, Logical Adjustment: The Case for a Government-Mandated Fleet EV Strategy

Rather than betting on retail EV sales, a structured fleet EV initiative would make Windsor indispensable.

• A fleet EV strategy would stabilize Windsor’s production by ensuring predictable, high-volume orders.
  
  
• Stellantis would have a clear use for NextStar’s battery production, keeping billions in investment viable.
  
  
• It aligns perfectly with government climate goals, making it easy to secure incentives.
  
  
• It positions Windsor as an EV leader before competitors react.
  
  
• A fleet EV mandate doesn’t just save Windsor…it could also secure the future of Oakville Assembly, protecting Ford’s EV production in Canada.
  
  
• Canada already has over 400,000 fleet vehicles.
  
  
• At just 25% electrification, demand would immediately reach 100,000 EVs per year.
  
  
• Scaling to 50% would create demand for 200,000 EVs annually…far exceeding Windsor’s current production volume.
  
  
• Fleet vehicles turn over faster than consumer vehicles, creating reliable, recurring demand.
  
  
• Centralized charging eliminates range anxiety, making EV adoption for fleet operators more palatable.
  
  

Making Fleet Adoption Seamless: The Role of Leasing & Residual Value Protection

One of the biggest hurdles for fleet operators is uncertainty around EV residual values and disposal at lease end. This is where a government-supported leasing model could make EV adoption frictionless.

• Instead of a large upfront cash incentive, funds could be allocated to a lease-end guarantee, offsetting any delta between residual values and actual market values.
• This approach allows the incentive to be deferred, reducing immediate financial strain while still providing long-term security for leaseholders.
• If the EV market matures as expected, the gap between residuals and market values will naturally decrease, further lowering government liability.
• Leases could be structured with attractive, government-backed residual values, making EVs a clear financial win over ICE fleet options.
• If public resistance grows, this same leasing model could later be extended to individual consumers, further expanding EV adoption.

A strong leasing and residual value support program would drive widespread fleet adoption, turning what could be a difficult transition into an easy and financially compelling move for operators.

For This to Work, a Strong Alliance is Required

A shift of this magnitude can’t happen in isolation. For Windsor’s auto industry to pivot successfully, Stellantis, LG, and the federal and provincial governments must work together.

• Stellantis needs to commit to a long-term production plan for fleet EVs in Windsor.
• LG and NextStar Energy need assurance that battery production will be used locally, ensuring full capacity utilization.
• The Federal Government must support this transition with policies that prevent other provinces from blocking investment.
• The Ontario Government must be a willing partner in making Windsor the center of fleet electrification.

Conclusion: A Mandate is Not a Radical Shift…It’s a Necessary Adjustment

A mandated fleet EV adoption policy is the missing piece that aligns all these forces. It provides certainty for automakers, ensuring that their investments in Canada are viable long-term. It gives governments a clear, structured pathway to meet their climate commitments without relying on consumer-driven adoption alone. It removes financial risk for fleet operators, making the transition to EVs an easy, logical decision rather than an uncertain gamble.

Windsor doesn’t have time to hope for a better outcome. It has to force one. The world is shifting, and the city is standing on the edge of history. The only question is: will it act before it’s too late.