South Korea’s LG Energy Solution is finalizing the acquisition of full ownership of NextStar Energy from Stellantis, the automaker. The joint venture between the two companies, established in 2022, aimed to construct Canada’s first large-scale battery manufacturing facility in Windsor, Ontario. Initially intended for the automotive industry, the plant’s focus shifted to producing batteries for power grid storage systems.
Stellantis disclosed that it would sell its 49% equity stake in NextStar to LG Energy Solution, with the transaction involving undisclosed favorable benefits. The deal is contingent on various conditions and approvals. Stellantis affirmed its commitment to remain a significant customer of NextStar, continuing to procure battery products from the facility.
Currently, approximately 1,300 individuals are employed at the Windsor plant, with a target of reaching 2,500 employees in the long term. The Canadian federal government has pledged up to $10 billion in production subsidies to NextStar Energy, complemented by an additional $5 billion from the provincial government.
Danies Lee, NextStar’s CEO, hailed the new ownership structure as fortifying Canada’s standing in battery manufacturing. The province anticipates no workforce reductions following Stellantis’ divestment from the factory. Ontario’s Minister of Economic Development, Job Creation, and Trade’s office spokesperson affirmed that no job losses are foreseen due to the ownership transfer.
Ontario Premier Doug Ford and Federal Industry Minister Melanie Joly voiced their approval of Stellantis’ decision. Joly highlighted the significance of LG’s investment in Canada, aligning with recent collaborations between Canada and Korea in the auto manufacturing sector.
Stellantis unveiled a downsizing of its electric vehicle initiatives on the same day, impacting its stock performance. Conservative MP Kyle Seeback emphasized the discord between Canadian vehicle manufacturers and government policies, urging tax reforms to support the industry.
Windsor Mayor Drew Dilkens praised LG’s role in the region’s manufacturing landscape, emphasizing the economic benefits generated by the ownership transition. Stellantis expressed confidence in LG’s ability to optimize the Windsor facility’s capacity for supplying batteries to support the global electrification roadmap.
The ownership change coincided with Canada’s decision to eliminate EV mandates, opting for incentives to promote electric vehicle adoption. The union representing NextStar workers expressed optimism about future negotiations with LG and emphasized the importance of fulfilling obligations to workers at Stellantis’ Brampton Assembly Plant.
Unifor President James Stewart highlighted LG’s strategic vision for business expansion and the potential for NextStar to diversify its offerings. Stewart noted the opportunity for NextStar to adapt to new technologies and cater to a broader customer base, while Stellantis can refocus on its primary operations.