Stellantis & LG ES announces battery joint venture
Stellantis and LG Energy Solution have announced a joint venture to manufacture battery cells and modules in North America. A factory with an annual production capacity of 40 GWh is planned to go into operation in the first quarter of 2024.
A corresponding letter of intent has now been signed, as both companies announce. The new plant will supply Stellantis vehicle plants in the USA, Canada and Mexico with battery modules. This does not only concern the battery-electric models of the US brands Jeep, Dodge and Ram, which Stellantis had presented during its ‘EV Day’ in July, but also plug-in hybrids.
According to the announcement, the location is currently still being examined, and further details on the plant will be announced at a later date. As the groundbreaking ceremony is scheduled for the second quarter of 2022, there will presumably already be a pre-selection for possible locations – but nothing has been announced on this so far. Stellantis emphasises that the transaction itself is still subject to “final documentation and customary closing conditions, including regulatory approvals”.
In unveiling its electric strategy, Stellantis had set a target of more than 40 per cent of its US sales coming from electrified vehicles by 2030. “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.”
Known as a numbers person, Tavares added that together with LGES they would lead the industry “with benchmark efficiency”. In a similar vein, Jong-hyun Kim, president and CEO of LG Energy Solution, added: “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 relationship between the two companies (or their predecessors) dates back to 2014, when FiatChrysler Automobiles ordered battery cells from LG Chem to electrify the Chrysler Pacifica Hybrid van.
For LGES, this is not the first joint venture with a US carmaker. The Ultium Cells joint venture with General Motors currently plans to build two battery factories in the US, one in Ohio and another in Tennessee near GM’s Spring Hills plant.