South Korea’s LG Energy Solution is set to take over full control of NextStar Energy from Stellantis, a major automaker. The joint venture between the two companies was established in 2022 to construct Canada’s first large-scale battery production facility in Windsor, Ontario. Recently, a shift was announced where the batteries manufactured at the plant would focus more on power grid storage systems rather than solely for the automotive sector.
Stellantis disclosed that it would be divesting its 49% equity stake in NextStar to LG Energy Solution in a statement released on a Friday morning. The automaker mentioned that the stake was sold for a nominal fee in exchange for undisclosed favorable benefits. The transaction is subject to certain conditions and approvals.
Despite the change in ownership, Stellantis affirmed its commitment as a customer and will continue procuring battery products from NextStar. Presently, approximately 1,300 individuals are employed at the Windsor facility, with a target of ultimately reaching 2,500 employees. The Canadian government had previously pledged up to $10 billion in production subsidies for NextStar Energy, with an additional $5 billion coming from the provincial government.
NextStar’s CEO, Danies Lee, remarked that the new ownership arrangement strengthens Canada’s standing in battery manufacturing and ensures ongoing investments in the Canadian workforce. The province anticipates no job cuts due to Stellantis’s sale of its stake in the factory.
Government officials, including Ontario Premier Doug Ford and federal industry minister Melanie Joly, welcomed the deal. They highlighted the positive impact on the local economy and emphasized LG’s commitment to long-term investment in Canada.
The ownership transfer coincided with Stellantis scaling back its electric vehicle initiatives, leading to a sharp decline in its Milan-listed shares. Conservative MP Kyle Seeback raised concerns about the discrepancy between Canadian vehicle manufacturers and government policies, advocating for measures to support the industry.
Windsor Mayor Drew Dilkens praised LG’s role in the region’s manufacturing landscape and the economic benefits it brings. Stellantis CEO Antonio Filosa emphasized the strategic importance of the ownership change for securing battery supply for electric vehicles.
The union representing workers at the Windsor factory expressed optimism about the future under LG’s ownership. Unifor lauded LG’s adaptability in responding to market changes and underlined the need for Stellantis to fulfill obligations to its workers at other facilities.
Overall, the acquisition by LG Energy Solution signifies a significant development in Canada’s battery manufacturing sector, with stakeholders optimistic about the long-term economic prospects.