South Korea’s LG Energy Solution is set to gain complete ownership of NextStar Energy from automaker Stellantis. The NextStar venture was established in 2022 to construct Canada’s first large-scale battery manufacturing facility in Windsor, Ontario, but a recent decision shifted the focus of the plant’s batteries towards power grid storage systems instead of primarily serving the automotive sector.
Stellantis revealed its intention to transfer its 49% equity stake in NextStar to LG Energy Solution in a statement on Friday, mentioning a nominal fee and undisclosed favorable benefits as part of the deal, pending necessary approvals. Stellantis affirmed its commitment as a customer and continued sourcing of battery products from NextStar.
The Windsor plant currently employs approximately 1,300 individuals, with plans to expand the workforce to 2,500 in the long term. Both federal and provincial governments have pledged substantial production subsidies, with up to $10 billion from the federal government and an additional $5 billion from the provincial government.
NextStar’s CEO, Danies Lee, highlighted that the ownership transition enhances Canada’s standing in battery manufacturing, ensuring continued investment in the Canadian workforce and manufacturing capacity for economic growth.
The transfer of ownership will not result in any job losses at the facility, according to Jennifer Cunliffe, a spokesperson for Ontario’s Minister of Economic Development, Job Creation and Trade, Vic Fedeli. The move was praised by Ontario Premier Doug Ford and Federal Industry Minister Melanie Joly, who emphasized the benefits of LG’s increased investment in Canada.
Stellantis saw a significant drop in its Milan-listed shares following the ownership change, coinciding with the company’s decision to scale back its electric vehicle ambitions. Observers noted the divergence between Canadian vehicle manufacturers and government policies, calling for measures to support the industry’s competitiveness.
Windsor Mayor Drew Dilkens welcomed LG’s expanded role in the region’s manufacturing ecosystem, predicting positive economic impacts and sustained growth. Stellantis CEO Antonio Filosa expressed optimism about the strategic shift, strengthening the battery supply chain for the company’s electric vehicles and aligning with global electrification plans.
The ownership transition coincided with Canada’s decision to eliminate EV mandates, opting for incentives to promote electric vehicle adoption. The union representing workers at the Windsor factory expressed support for LG’s approach and emphasized the importance of fulfilling obligations to workers at other Stellantis facilities.
Unifor Local 444 President James Stewart viewed the ownership change as an opportunity for NextStar to diversify its customer base and expand its technological capabilities. Stewart also noted the benefits for Stellantis in refocusing on its core operations amidst market challenges.