LG Electronics and Magna form $1bn electric car jv
24 December, 2020
South Korea's LG Electronics will spin off its electric car parts organization into a new joint venture worth nearly $1 billion with Canada’s automotive supplier Magna International as the global vehicle market phases out conventional combustion engine cars and switches to electrification.
The JV, tentatively called LG Magna e-Powertrain, will produce e-motors, inverters, on-board chargers and electric-drive systems.
“The marketplace for e-motors, inverters and electric-drive systems is likely to have significant growth between now and 2030, and the JV will target this fast-growing global industry with a world-class portfolio,” the companies said in a joint statement on Wednesday.
Magna will buy a good 49 per cent stake in the new unit for 501.6 billion won ($453 million) as the remainder will be owned by LG Electronics, the South Korean company said within an exchange filing.
LG will help accelerate Magna’s time to market and scale of making for electrification components, even while Magna provides its skills in program and devices integration to the venture, according to the statement.
“By combining our strengths, we be prepared to gain investment proficiency and speed to market with synergies to accomplish more, almost all while continuing to capitalise on the acceleration of the electrified powertrain market,” Swamy Kotagiri, president and leader of Magna, said.
Automotive suppliers globally are increasingly positioning themselves to benefit from the growth in electric cars. Information this week explained that Apple aims to create its first electric car by 2024 and can use its breakthrough battery technology.
LG has experience found in the development of electric powered vehicle components for models including the Chevrolet Bolt EV and Jaguar I-Tempo. Founded in 1957, Magna was the world’s third-largest supplier of powertrains, chassis and other various parts by revenue last year.
The brand new company will service orders from Magna and its clients. Electric vehicle pieces to be used involve LG Electronics’ battery heater device and its electricity relay assembly division, the statement added.
“Manufacturers ought to be disruptive to keep leadership positions in electrification and, through this deal, LG is entering a new phase found in its automotive pieces business, a rise opportunity with enormous probable,” Kim Jin-yong, president of the LG electronics vehicle component Solutions Company, said.
LG Magna e-Powertrain could have a lot more than 1,000 employees across spots in the US, South Korea and China.
The venture may also have a software R&D centre in Michigan, where Magna’s US headquarters is situated, according to Bloomberg.
The transaction is likely to close in July, subject to obtaining LG shareholder approval.
The tie-up is LG Electronics’ second major investment in the market after it bought automotive-lighting and headlight-systems provider ZKW Group in 2018 for €1.1bn ($1.3bn).
Source: www.thenationalnews.com
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