South Korea’s LG Energy Solution is set to take over complete ownership of NextStar Energy from automaker Stellantis. The partnership, established in 2022 to construct Canada’s first large-scale battery manufacturing facility in Windsor, Ont., will now see batteries from the plant primarily allocated for power grid storage systems rather than the automotive sector, as initially intended.
Stellantis has announced the sale of its 49% equity stake in NextStar to LG Energy Solution, with the transaction involving undisclosed favorable benefits. The deal is subject to various conditions and approvals. Stellantis affirms its commitment to remain a key 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 run. 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, expressed that the new ownership arrangement reinforces Canada’s standing in battery manufacturing, ensuring continued investments in the Canadian workforce and manufacturing capacity for sustained economic advantages.
Ontario officials confirmed that the ownership transition will not result in any layoffs at the facility. The move was praised by various government figures, including Ontario Premier Doug Ford and federal industry minister Melanie Joly, who highlighted the positive impact on Canada’s auto industry.
The ownership change coincided with Stellantis scaling back its electric vehicle initiatives, leading to a significant drop in its Milan-listed shares. The shift in ownership structure is viewed as a strategic move to secure battery supply for Stellantis’ electric vehicles, aligning with the company’s global electrification goals.
Local union Unifor expressed optimism about the transition, emphasizing LG’s adaptability in responding to market shifts. The union looks forward to continued collaboration with LG, ensuring job security for its members at NextStar.
Overall, the ownership transfer is seen as a move to bolster Canada’s battery manufacturing sector, paving the way for sustained economic growth and technological advancements in the region.