South Korea’s LG Energy Solution is set to gain complete ownership of NextStar Energy from Stellantis, the automotive company. NextStar, established in 2022 as a partnership between the two firms, was aimed at constructing Canada’s initial large-scale battery production facility in Windsor, Ontario. A recent update revealed that the batteries manufactured at the plant will now prioritize power grid storage systems over the automotive sector, contrary to the original plan.
Stellantis announced the sale of its 49% equity share in NextStar to LG Energy Solution, citing undisclosed favorable benefits received in exchange for a nominal fee. The transaction is pending certain conditions and approvals. Despite the ownership shift, Stellantis affirmed its commitment as a customer and confirmed its intention to continue procuring battery products from NextStar.
Approximately 1,300 individuals are currently employed at the Windsor facility, with a target of reaching 2,500 employees in the long run. The Canadian government had previously pledged up to $10 billion in production subsidies to NextStar Energy, with an additional $5 billion contributed by the provincial government. NextStar’s CEO, Danies Lee, lauded the new ownership structure as strengthening Canada’s role in battery manufacturing and ensuring ongoing investments in the Canadian workforce.
According to a spokesperson for Ontario’s Minister of Economic Development, Job Creation and Trade, the province does not anticipate any job losses resulting from Stellantis divesting its stake in the factory. The decision was met with approval from Ontario Premier Doug Ford and federal industry minister Melanie Joly, who emphasized Canada’s commitment to supporting companies that invest in the country.
The ownership transfer aligns with Stellantis’s recent announcement of scaling back its electric vehicle pursuits, impacting its stock performance. Conservative MP Kyle Seeback raised concerns about the divergence between Canadian vehicle manufacturers and government policies. Windsor Mayor Drew Dilkens hailed LG’s role in the region’s manufacturing landscape, foreseeing economic benefits and local business growth from the ownership transition.
Stellantis emphasized the strategic importance of the deal, enabling LG Energy Solution to maximize the Windsor facility’s capacity for battery supply in electric vehicles. The ownership change coincided with Canada’s decision to abandon EV mandates in favor of incentives, sparking a shift in the automotive industry’s trajectory. The union representing workers at the Windsor factory expressed optimism about its continued collaboration with LG and emphasized the need for Stellantis to fulfill its obligations to workers at other facilities.