Automotive giant Stellantis and LG Energy Solution have announced they are to form a joint venture to produce battery cells and modules for North America.
The MOU states that the parties intend a joint venture to establish a new battery manufacturing facility that will help power Stellantis’ goal of realizing more than 40% of its sales in the U.S. comprised of electrified vehicles by 2030. Targeted to start by the first quarter of 2024, the plant aims to have an annual production capacity of 40 gigawatt hours.
The batteries produced at the new facility will be supplied to Stellantis assembly plants throughout the US, Canada, and Mexico for installation in next-generation electric vehicles ranging from plug-in hybrids to full battery electric vehicles that will be sold under the Stellantis family of brands.
“Today’s announcement is further proof that we are deploying our aggressive electrification road map and are following through on the commitments we made during our EV Day event in July,” said Carlos Tavares, CEO of Stellantis. “With this, we have now determined the next ‘gigafactory’ coming to the Stellantis portfolio to help us achieve a total minimum of 260 gigawatt hours of capacity by 2030. I want to warmly thank each person involved in this strategic project. Together, we will lead the industry with benchmark efficiencies and deliver electrified vehicles that ignite passion.”
“Establishing a joint venture with Stellantis will be a monumental milestone in our long-standing partnership,” said Jong-hyun Kim, President and CEO of LG Energy Solution. “LGES will position itself as a provider of battery solutions to our prospective customers in the region by utilizing our collective, unique technical skills and mass-producing capabilities.”
The partnership between the two companies in electrified vehicles dates back to 2014 when LG Energy Solution (then LG Chem) was selected by Stellantis (then Fiat Chrysler Automobiles) to supply the lithium-ion battery pack system and controls for the Chrysler Pacifica Hybrid, the industry’s first electrified minivan. With this announcement, the two companies look to solidify their partnership even further and continue leveraging each other’s strengths.
Stellantis plans to invest more than €30bn through 2025 in electrification and software development, while targeting to continue to be 30 percent more efficient than the industry with respect to total Capex and R&D spend versus revenues.
The location of the new facility is currently under review and further details will be shared at a later date. The groundbreaking for the facility is expected to take place in the second quarter of 2022.
The transaction is subject to agreement on definitive documentation and customary closing conditions, including regulatory approvals.