South Korea’s LG Energy Solution is set to acquire complete ownership of NextStar Energy from Stellantis, an automaker. NextStar Energy was established in 2022 as a joint venture between the two companies to construct Canada’s inaugural large-scale battery manufacturing facility in Windsor, Ontario. The original plan to focus on supplying batteries for the automotive sector has shifted towards prioritizing power grid storage systems, as announced in November.
Stellantis revealed that it will be selling its 49% equity stake in NextStar to LG Energy Solution. The transaction, subject to various conditions and approvals, involves the exchange for undisclosed beneficial advantages. Stellantis affirmed its commitment to continue sourcing battery products from NextStar despite the ownership change.
Approximately 1,300 individuals are presently employed at the Windsor plant, with a target of expanding the workforce to 2,500 in the long run. The Canadian federal government has pledged up to $10 billion in production subsidies to NextStar Energy, with an additional $5 billion contribution from the provincial government.
Danies Lee, the CEO of NextStar, hailed the new ownership arrangement as fortifying Canada’s position in battery manufacturing, ensuring continued investment in the local workforce, manufacturing capacity, and delivering economic benefits.
Ontario’s Minister of Economic Development, Job Creation, and Trade, Jennifer Cunliffe, assured that the ownership transition will not result in layoffs at the facility. The decision was praised by Ontario Premier Doug Ford and federal industry minister Melanie Joly as a positive development for Canada’s automotive industry.
Stellantis faced a significant decline in its Milan-listed shares following the announcement of scaling back its electric vehicle initiatives. This move has sparked concerns among policymakers and industry stakeholders regarding the alignment of government policies with the automotive sector’s direction.
Windsor Mayor Drew Dilkens emphasized the importance of LG’s role in the regional manufacturing landscape, anticipating substantial economic benefits from the ownership transition. Stellantis CEO Antonio Filosa highlighted the strategic significance of empowering LG Energy Solution to maximize the Windsor facility’s capacity and secure the battery supply for electric vehicles.
The ownership shift coincided with Canada’s decision to abolish EV mandates and reintroduce incentives for electric vehicle purchases. The union representing workers at the Windsor factory expressed optimism about the future under LG’s ownership and urged Stellantis to address outstanding obligations to workers at its Brampton Assembly Plant.
James Stewart, President of Unifor Local 444, viewed LG’s acquisition as an opportunity for NextStar to diversify its customer base and adapt to evolving market demands. The transition is expected to enable NextStar to explore new technologies and expand its offerings to attract a broader range of customers.