South Korea’s LG Energy Solution is set to take full control of NextStar Energy from Stellantis, the automotive company. NextStar Energy, a collaborative project initiated in 2022 between the two firms, aimed to establish Canada’s premier large-scale battery manufacturing plant in Windsor, Ontario. However, a recent decision shifted the focus of the plant towards producing batteries for power grid storage systems instead of primarily for the automotive sector.
Stellantis announced the sale of its 49% equity stake in NextStar to LG Energy Solution, mentioning undisclosed benefits received in exchange for the stake. The deal is subject to various conditions and approvals, with Stellantis confirming its commitment as a customer, continuing to procure battery products from NextStar.
The Windsor plant currently employs around 1,300 individuals, 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, while the provincial government is contributing an additional $5 billion towards NextStar Energy.
According to NextStar’s CEO, Danies Lee, the new ownership arrangement bolsters Canada’s standing in battery manufacturing, ensuring continued investment in the Canadian workforce and manufacturing capacity for enduring economic advantages.
Ontario authorities reassured that Stellantis’ divestment in the factory would not lead to any job losses, emphasizing job security at the facility. Government officials, including Premier Doug Ford and federal industry minister Melanie Joly, welcomed the ownership change, highlighting its positive impact on the local economy and long-term growth prospects.
Stellantis’ shares experienced a significant decline following the announcement, coinciding with the company’s revised electric vehicle strategy. Different perspectives emerged among political figures, with calls for policy adjustments to support Canadian vehicle manufacturers and enhance affordability through tax reforms.
Windsor Mayor Drew Dilkens regarded LG Energy Solution as a pivotal entity in the region’s manufacturing landscape, foreseeing substantial economic benefits and enhanced resilience. Stellantis CEO Antonio Filosa expressed optimism about the transition, emphasizing the strategic importance of facilitating battery supply for electric vehicles amidst evolving market dynamics.
The ownership shift coincides with Canada’s decision to eliminate EV mandates, opting for incentives to drive electric vehicle adoption. The union representing workers at the Windsor factory welcomed the transition, expressing readiness to engage in negotiations with LG while urging Stellantis to meet its obligations to workers at other facilities.