By Heejin Kim and Giulio Piovaccari
SEOUL, Feb 6 (Reuters) – South Korea’s LG Energy Solution on Friday said it plans to buy the 49% stake held by Stellantis in their battery joint venture in Canada for the nominal amount of $100.
Stellantis also said on Friday it would book charges of around 22.2 billion euros ($26.5 billion) in the second half of last year as the Franco-Italian automaker scales down electric-vehicle development plans and launches a “strategic shift.”
Stellantis and LGES are the latest companies to bear the brunt of stagnating demand for EVs under the Trump administration, which last year scrapped a consumer tax credit for EV purchases.
Stellantis and LG had unveiled a major investment in a joint venture in Ontario, Canada, in 2022, part of the carmaker’s ambitious electrification strategy. More than C$5 billion ($3.65 billion) has been invested in the facility to date, LG said in a statement.
LG Energy Solution said the factory, called NextStar Energy, will focus on batteries for energy storage systems, adding that it will supply electric vehicle batteries to Stellantis and other North American customers.
“Full ownership of NextStar Energy will enable us to respond swiftly to the growing demand from the ESS market,” said David Kim, chief executive officer of LG Energy Solution, in a statement.
LG Energy Solution launched a series of battery joint ventures with major automakers in North America during the administration of former President Joe Biden, which promoted EV adoption. But last year, LG Energy Solution agreed with General Motors to buy the latter’s stake in their joint venture battery plant in Lansing, Michigan.
The South Korean battery company is grappling with the fallout from the cancellation of major battery contracts including a multi-billion dollar deal with Ford.
($1 = 1.3688 Canadian dollars)
(Reporting by Heejin Kim in Seoul and Giulio Piovaccari; Writing by Hyunjoo Jin; Editing by Ed Davies and Thomas Derpinghaus)
Comments