LG Energy Solution said Friday that it will take full control of its Canadian battery joint venture with Stellantis, as part of a business overhaul to focus on energy storage systems.
In a regulatory filing, the South Korean battery maker said it will acquire Stellantis’ 49 percent stake in their joint venture, NextStar Energy, for $100. The deal will turn the company’s Canadian plant into a wholly owned subsidiary of LG Energy Solution, effectively ending the companies’ joint venture partnership.
NextStar Energy was established in 2022 amid the electric vehicle boom; LG Energy Solution invested about 2.2 trillion won ($1.49 billion) in its 51 percent stake and Chrysler parent Stellantis injected roughly $980 million.
An industry official said the deal allows LG Energy Solution to secure full control of the plant’s production capacity at a fraction of the original investment cost.
LG Energy Solution said it plans to develop the plant into a strategic base for its North American operations, with a focus on meeting the rising demand for energy storage systems.
The company explained that as the sole owner of the plant, it will be eligible for Canadian investment subsidies and production incentives, which will help strengthen price competitiveness and profitability.
Amid an industry-wide slowdown in EV demand, the Canadian facility expanded its portfolio beyond EV batteries to include ESS, beginning production of lithium iron phosphate batteries for ESS in November last year.
Despite Stellantis’ exit, the two companies will continue cooperation, with Stellantis continuing to source battery products from NextStar Energy under existing supply agreements.
“LG Energy Solution sees growth opportunities in North America by situating a key production hub in Canada,” said Kim Dong-myung, CEO of LG Energy Solution, in a press release.
“Full ownership of NextStar Energy will enable us to respond swiftly to the growing demand from the ESS market and position us to play a key role in Canada’s EV industry by securing additional North American-based customers.”
“By enabling LG Energy Solution to fully leverage the Windsor facility’s capacity, we are strengthening its long-term viability while securing the battery supply for our electric vehicles,” said Antonio Filosa, CEO of Stellantis. “This is a smart, strategic step that supports our customers, our Canadian operations and our global electrification roadmap.”
With the acquisition, LG Energy Solution will operate three major ESS production bases in North America, including in Holland and Lansing, Michigan.
