LG electronics has spun-off its electric car components business into a new joint venture with Canadian automotive giant Magna International. LG is not the only consumer electronics company Magna has been associated with as last year it partnered with Sony for its electric car which was showcased at CES 2020. This new company will be called LG Magna e-Powertrains. Magna will have to buy 49 per cent stake in the new unit which has been valued at $453 million while the remainder will be owned by LG electronics. The JV will make electric motors, inverters, electric drive systems and LG's battery heaters in factories in Incheon in South Korean and Nanjing in China. The company will service both Magna as well as Magna's clients.
Magna's new software R&D facility in Michigan which is also its US headquarters will also be integrated into this new joint venture. "The market for e-motors, inverters and electric-drive systems is expected to have significant growth between now and 2030, and the JV will target this fast-growing global market with a world-class portfolio," the companies said in a joint media release. "LG will help accelerate Magna's time to market and scale of manufacturing for electrification components, while software and systems integration are competencies that Magna brings to this venture."
Automotive suppliers are increasingly positioning themselves towards pivoting for electric cars as they represent the future of transportation from a cost-effectiveness and sustainability point of view. But they can't do everything on their own as the technology in EVs needs the expertise of tech companies like EVs and hence many are coming together.
Recently, it was revealed that even Apple's plans for the Apple Car could come to fruition by 2024 and it had even had talks with Magna for manufacturing the vehicle in question.
Also read: Apple Car Could Come By 2024