LG Energy Solution, based in South Korea, is now fully acquiring Next Star Energy from automaker Stellantis.
Next Star was formed as a joint venture between the two companies back in 2022 to establish Canada’s first major battery manufacturing plant in Windsor, Ontario.
In November, it was revealed that batteries produced at this facility would focus on power grid storage systems instead of mainly serving the automotive sector as initially planned.
Stellantis announced it will be selling its 49 percent ownership in Next Star to LG Energy Solution in a statement released Friday morning.
A representative for Stellantis mentioned that the stake was sold for a minimal fee in exchange for “undisclosed favorable benefits.” The agreement is subject to certain conditions and additional approvals, according to the company.
Stellantis confirmed it will remain a “committed customer” and plans to keep sourcing battery products from Next Star.
Currently, both companies report that approximately 1,300 people are employed at the Windsor facility, with aspirations of increasing that number to 2,500 over time.
The federal government has previously committed up to $10 billion in production incentives for Next Star Energy. An additional $5 billion will come from the provincial government.
“This new ownership structure enhances Canada’s status as a leader in battery production,” stated Danies Lee, CEO of Next Star.
“It ensures long-term stability for investing further into our Canadian workforce and manufacturing capabilities while providing lasting economic advantages for Canada and Ontario.”
The Windsor, Ont., plant currently employs around 1,300, according to Stellantis and LG Energy Solution. (Next Star Energy)
The province does not anticipate any job losses resulting from Stellantis divesting its stake in the factory.
“This ownership change will not result in any layoffs at the facility,” said Jennifer Cunliffe, spokesperson for Vic Fedeli’s office. He serves as Ontario’s Minister of Economic Development, Job Creation and Trade.
Ontario Premier Doug Ford described Stellantis’s decision as a positive move, while federal industry minister Melanie Joly also expressed approval about the development.
“I think it’s really good news; I believe it’s very encouraging and indicates that LG is committed for the long haul,” she told reporters during an event in Guelph, Ont., where she spoke about Canada’s auto strategy unveiled Thursday.
“[I’m] saying that we will invest in those who invest in us. What do I mean by that? We just signed a partnership with Korea on auto manufacturing last week. What are we seeing this week? LG is buying out Stellantis to invest more in Canada. Good news.”
WATCH | Joly vows that Canada will recover cash from Stellantis:
‘We will get our money back from Stellantis,’ industry minister says
Industry Minister Mélanie Joly stated that the federal government expects to recover ‘our money’ from Stellantis after spending over $220 million assisting the automaker upgrade its facilities prior to announcing plans to shift some production to the U. S.
This announcement coincided with Stellantis revealing significant reductions in its electric vehicle goals which negatively impacted their stock prices amid challenges faced by automakers navigating changes towards cleaner transportation methods.
Conservative MP Kyle Seeback addressed this shift when questioned about the recent news calling it “significant.”
“It seems like companies manufacturing vehicles here are heading one way while the Liberal government is moving another direction; I don’t think that’s beneficial for Canadian workers,” Seeback commented.
He urged lawmakers to eliminate taxes on Canadian-made vehicles and lift industrial carbon taxes imposed on auto manufacturers so they could offer more affordable options.
Shares of Stellantis listed on Milan fell sharply by up to 25 percent on Friday-the lowest point since its formation through merging Fiat Chrysler and Peugeot maker PSA earlier this year.
“By allowing LG Energy Solution full access capacity at Windsor facility we enhance its longevity while securing battery supply needed for electric vehicles,” stated Stellantis CEO Antonio Filosa during Friday’s announcement.
“This smart strategic move supports our customers along with operations across Canada-and aligns perfectly with our global electrification strategies.”
The news regarding ownership transition arrives just after Canada’s announcement detailing cancellations of EV mandates requiring 60 percent of newly manufactured cars being electric by 2030 followed by complete transition before 2035.
Instead, a five-year incentive program returns offering consumers purchasing EVs rebates reaching up-to $5k.
‘We will get our money back from Stellantis,’ industry minister says
Industry Minister Mélanie Joly stated that the federal government expects to recover ‘our money’ from Stellantis after spending over $220 million assisting the automaker upgrade its facilities prior to announcing plans to shift some production to the U. S.
This announcement coincided with Stellantis revealing significant reductions in its electric vehicle goals which negatively impacted their stock prices amid challenges faced by automakers navigating changes towards cleaner transportation methods.
Conservative MP Kyle Seeback addressed this shift when questioned about the recent news calling it “significant.”
“It seems like companies manufacturing vehicles here are heading one way while the Liberal government is moving another direction; I don’t think that’s beneficial for Canadian workers,” Seeback commented.
He urged lawmakers to eliminate taxes on Canadian-made vehicles and lift industrial carbon taxes imposed on auto manufacturers so they could offer more affordable options.
Shares of Stellantis listed on Milan fell sharply by up to 25 percent on Friday-the lowest point since its formation through merging Fiat Chrysler and Peugeot maker PSA earlier this year.
“By allowing LG Energy Solution full access capacity at Windsor facility we enhance its longevity while securing battery supply needed for electric vehicles,” stated Stellantis CEO Antonio Filosa during Friday’s announcement.
“This smart strategic move supports our customers along with operations across Canada-and aligns perfectly with our global electrification strategies.”
The news regarding ownership transition arrives just after Canada’s announcement detailing cancellations of EV mandates requiring 60 percent of newly manufactured cars being electric by 2030 followed by complete transition before 2035.
Instead, a five-year incentive program returns offering consumers purchasing EVs rebates reaching up-to $5k.
Union response
The union representing employees at Windsor’s factory looks forward continuing negotiations under LG’s leadership. An online statement shared by Unifor praised LG’s adaptability maintaining production amidst market shifts.”..Local members associated within Local-444 working alongside next star shall retain employment consistent throughout collective agreements expiring July this year-while urging stellantes fulfil outstanding obligations toward members located within inactive brampton assembly location’.Unifor President James Stewart interprets these developments reflect lg desire expand horizons gaining broader clientele base’... “Companies like Toyota Honda Ford.. might hesitate buying products tied directly under control derived stellauntis,” Stewart relayed quoting newspaper source.”This decoupling grantsnextstar opportunity diversify offerings embracing innovative technologies enhancing responsiveness new customers.'” Beneath same topic concerning stellante comment indicating allows firm refocus core business objectives.’ ‘They’ve had navigate numerous changes latter half-year reflecting necessary adjustments driven evolving market conditions within North America” – Mr. stewart stated reaffirming direct orders remain unaffected since next star doesn’t furnish products directly supplyingstellauntis’ windsor assembly facilities.’
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