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South Korean-based LG Energy Solution has acquired full ownership of NextStar Energy from automaker Stellantis.
NextStar was a joint venture between the two companies that came about in 2022 to build Canada’s first large-scale battery manufacturing facility in Windsor, Ont.
In November, it was announced batteries made at the plant would now be prioritized for power grid storage systems and not primarily the automotive industry as originally promised.
Stellantis said it would be selling its 49 per cent equity stake in NextStar to LG Energy Solution, in a Friday morning statement.
Stellantis says it remains a “committed customer” and will continue to source battery products from NextStar.
To date, the companies say roughly 1,300 people are employed at the Windsor plant with a long-term goal of 2,500 having employees.
The federal government has previously pledged up to $10 billion in production subsidies to NextStar Energy. The other $5 billion is coming from the provincial government.
“This new ownership structure strengthens Canada’s position as a leader in battery manufacturing,” said Danies Lee, NextStar’s chief executive officer.
“It provides long-term certainty to continue investing in our Canadian workforce and our manufacturing capacity while delivering sustained economic benefits for Canada and Ontario.”
The move comes on the same day Stellantis announced a massive scale back of its electric vehicle ambitions, hammering its shares as automakers pay the price of misjudging the switch to cleaner driving.
The company’s Milan-listed shares plunged as much as 25 per cent on Friday, the lowest since Stellantis was created in early 2021 through the merger of Fiat Chrysler and Peugeot maker PSA.
“By enabling LG Energy Solution to fully leverage the Windsor facility’s capacity, we are strengthening its long-term viability while securing the battery supply for our electric vehicles,” said Antonio Filosa in a statement issued Friday. He’s the CEO of Stellantis.
“This is a smart, strategic step that supports our customers, our Canadian operations, and our global electrification roadmap.”
The news of the ownership change comes a day after Canada announced, among other things, that it is scrapping EV mandates that would require 60 per cent of all new cars to be electric by 2030 and 100 per cent by 2035.
Instead, EV incentives will make a return with a five-year program given people and businesses up to $5,000 when they buy one.
Union response
The union representing workers at the Windsor factory says it’s looking forward to continuing its bargaining relationship with LG.
In an online statement, Unifor says it commends LG for its “versatility in pivoting to maintain production in a changing marketplace.”
“Local 444 members at NextStar will continue to be employed under the terms of their collective agreement, which is set to expire in July of this year,” the union stated, while at the same time demanding Stellantis fulfil what it refers to as “outstanding obligations” to members at its idled Brampton Assembly Plant.
More to come.