LG Energy Solution Acquires Stellantis’s Ontario EV Battery Stake for $100
South Korea’s LG Energy Solution is set to acquire Stellantis’s 49% stake in their Ontario battery joint venture for just US$100. This move marks a significant development as both companies navigate challenges in the electric vehicle (EV) market.
Details of the Acquisition
LG Energy Solution’s decision was announced on Friday, following Stellantis’s plans to incur approximately €22.2 billion (around US$35.81 billion) in charges during the second half of the previous year. This financial adjustment is part of Stellantis’s strategic pivot to scale down its electric vehicle development initiatives.
Context of the EV Market
The challenges facing Stellantis and LG Energy Solution are indicative of broader industry trends. The demand for electric vehicles has stagnated in the U.S., particularly after the Trump administration eliminated consumer tax credits for EV purchases. This situation has led both companies to reassess their strategies and investments.
Investment in Ontario’s NextStar Energy Facility
In 2022, Stellantis and LG Energy Solution had announced a significant investment in the NextStar Energy facility located in Windsor, Ontario. To date, over $5 billion has been invested in this plant, which is designed to manufacture batteries for energy storage systems.
- Full ownership of the NextStar Energy facility will allow LG to respond to growing energy storage demands.
- The factory is also expected to supply EV batteries to Stellantis and other North American manufacturers.
Future Directions
According to David Kim, CEO of LG Energy Solution, acquiring full control of NextStar Energy will enhance their ability to meet the increasing needs of the energy storage systems market. This acquisition comes as LG navigates recent setbacks, including the cancellation of major contracts, like the one with Ford.
This strategic move indicates LG Energy Solution’s continued adaptation in a volatile market. As the EV landscape evolves, the company aims to strengthen its position within North America’s battery manufacturing sector.
