Stellantis and Samsung SDI announced plans to invest over $3.2 billion in a new electric vehicle battery plant in Kokomo, Indiana.

The announcement was not altogether surprising but it did come at an important time for Stellantis as well as the United Auto Workers (UAW) Union. It is the 6th EV battery plant announced by the automaker to help along its transition to fully electric vehicles.

The UAW has been on strike for almost a month against the big 3 American automakers: Ford, Stellantis, and General Motors. The main focus of the fight has been to bargain for fair wages after employees started to see their real wages drop as inflation grew rampantly over the past few years.

However, better wages aren’t the only goal for the UAW. Electric vehicles are likely to replace internal combustion engine vehicles for the most part over the next decade and auto workers are well aware of the shifting winds.

EVs are actually much easier to build and take significantly less labor than gas vehicles. This is because they are simply much less complex. Internal combustion engine vehicles are powered and controlled by a complicated system of mechanical parts, including a complex engine and transmission which both take a considerable amount of skilled labor to build.

Electric vehicles, on the other hand, require only a bunch of batteries and a motor (or more). These components take drastically less skilled labor to build and assemble into a completed drivetrain. Even the top American automakers will admit that. Ford’s own CEO Jim Farley is quoted to have said that “it takes 40% less labor to make an electric car.”

This could mean that the big 3 automakers will no longer need 40% of their assembly staff within a decade or less. This notion has autoworkers terrified that their jobs will be the next to go, leaving them without a job entirely.

The president of the UAW union, Shawn Fain, said “The plan was to draw down engine and transmission plants and permanently replace them with low-wage battery jobs.” The UAW union has lobbied the automakers to include assurances that battery plant workers would be included in the company’s national agreement.

General Motors was able to get the UAW union to back off of a planned strike at one of its most profitable vehicle plants by promising to do just that last week. This was no doubt a major win for the union, suggesting that Ford and Stellantis will eventually agree to the same or similar terms.

Stellantis Plans New Line of EVs

Stellantis’ announcement of its plans to build an EV battery plant in Kokomo came only a few days after General Motors agreed to include battery plant workers. This suggests that Stellantis may be ready to make a similar agreement with the UAW union.

The plant will actually be the second Stellantis battery plant in Kokomo, Indiana. The other facility is already under construction and is expected to cost the automaker $2.5 billion. It’s scheduled to start producing batteries in Q1 2025. The second plant is expected to be operational about 2 years after that.

Stellantis has plans to build a range of different fully electric vehicles from a low-cost Fiat EV to a luxurious electric Jeep and even an EV Dodge muscle car. The company’s assembly workforce was worried that it would mostly be replaced by low-cost jobs but this may no longer be the case.

It’s important to note that Stellantis has not yet announced such an agreement yet, though the timing is certainly telling.