South Korea-based LG Energy Solution is set to take over full ownership of NextStar Energy from automaker Stellantis. The joint venture between the two was established in 2022 to construct Canada’s initial large-scale battery manufacturing facility in Windsor, Ontario. Recent developments indicate a shift in focus for the plant’s batteries towards power grid storage systems rather than their original automotive industry application.
Stellantis has confirmed the sale of its 49% stake in NextStar to LG Energy Solution, with the transaction involving undisclosed benefits for a nominal fee. Stellantis assured continued partnership as a significant buyer of battery products from NextStar, where approximately 1,300 individuals are presently employed, with plans to eventually increase the workforce to 2,500.
Government support for NextStar Energy includes up to $10 billion in production subsidies from the federal level and an additional $5 billion from the provincial government. The acquisition by LG Energy Solution is seen as a strategic move to reinforce Canada’s leadership in battery production, as emphasized by NextStar’s CEO, Danies Lee.
Despite the ownership transfer, no job losses are anticipated at the Windsor plant, as stated by Jennifer Cunliffe, a representative for Ontario’s Minister of Economic Development. Political figures such as Ontario Premier Doug Ford and federal industry minister Melanie Joly have expressed approval of LG Energy Solution’s acquisition, underscoring its positive impact on the region’s economic landscape.
Stellantis’s decision to divest its stake in NextStar coincided with a revision of its electric vehicle plans, resulting in a significant drop in its Milan-listed shares. The move aligns with the company’s strategic direction towards sustainable electrification efforts, supporting the supply of batteries for its electric vehicle lineup.
The union representing workers at the Windsor factory, Unifor, has welcomed LG’s ownership and looks forward to continuing negotiations. The union highlights the importance of maintaining production in a changing market environment and stresses the need for Stellantis to fulfill obligations to workers at its Brampton Assembly Plant.
Overall, the acquisition of NextStar by LG Energy Solution marks a significant development in Canada’s battery manufacturing sector, with implications for job security, economic growth, and the automotive industry’s electrification efforts.