South Korea’s LG Energy Solution is set to take over full ownership of NextStar Energy from Stellantis, an automaker. NextStar Energy, a joint venture established by the two companies in 2022 to construct Canada’s first large-scale battery production facility in Windsor, Ontario, will now focus on producing batteries for power grid storage systems rather than primarily for the automotive sector as initially intended.
In a statement released on Friday morning, Stellantis revealed its decision to sell its 49% equity stake in NextStar to LG Energy Solution for a nominal fee in exchange for undisclosed favorable benefits. The deal is subject to various conditions and approvals. Despite the ownership change, Stellantis plans to remain a loyal customer and continue sourcing battery products from NextStar.
Approximately 1,300 people are currently employed at the Windsor plant, with a target of increasing the workforce to 2,500 in the long term. The federal government has pledged up to $10 billion in production subsidies for NextStar Energy, with an additional $5 billion coming from the provincial government.
Danies Lee, CEO of NextStar, expressed optimism about the new ownership structure, emphasizing that it strengthens Canada’s position in battery manufacturing and ensures continued investment in the Canadian workforce and manufacturing capacity, leading to sustained economic benefits.
Ontario’s Minister of Economic Development, Job Creation, and Trade, Vic Fedeli’s office confirmed that the ownership transfer will not result in any job losses at the facility. The decision received positive feedback from Ontario Premier Doug Ford and federal industry minister Melanie Joly, who praised LG’s commitment to Canada’s automotive industry.
The announcement coincided with Stellantis scaling back its electric vehicle initiatives, causing a significant drop in its Milan-listed shares. Conservative MP Kyle Seeback highlighted the disparity between Canadian vehicle manufacturers’ direction and government policies, calling for tax reductions to make domestic vehicles more affordable.
Windsor Mayor Drew Dilkens hailed LG as a cornerstone of the region’s manufacturing ecosystem, predicting substantial economic benefits for Windsor-Essex and the surrounding area. Stellantis CEO Antonio Filosa echoed this sentiment, emphasizing the strategic importance of securing battery supply for electric vehicles through the Windsor facility.
The union representing workers at the Windsor factory, Unifor, expressed readiness to continue negotiations with LG, praising the company’s adaptability in response to market changes. Unifor highlighted the need for Stellantis to fulfill obligations to workers at its idled Brampton Assembly Plant.
Overall, the ownership transition is seen as a strategic move to bolster Canada’s battery manufacturing sector and ensure long-term economic growth and stability for the region.
