LG Energy Solution acquires Stellantis’ stake in NextStar Energy

LG Energy Solution (LGES) is restructuring its operations in North America. As part of this process, it is acquiring full ownership of NextStar Energy, while Stellantis withdraws from the large-scale battery project. This move was foreshadowed earlier; for example, it was reported in November that while the joint battery factory in Windsor, Canada, was on the verge of starting series production of battery cells, these would initially not be for electric cars but for stationary energy storage systems (ESS)—a sector Stellantis does not serve.

The partners have only indirectly addressed why the transaction is taking place now. They state that under LGES’s sole ownership, a broader customer base, including the energy storage systems sector, can be “better served,” and that they can also “respond with greater agility to market conditions and demand to pursue future growth opportunities.” In other words, the unfavourable framework conditions for electric vehicles in the USA likely no longer support the economic operation of the plant, given its original plans for EV battery production.

Module production has been underway for some time

A brief look back: NextStar Energy was founded in 2022 as a joint venture between the two companies to establish Canada’s first large-scale battery factory in Windsor, Ontario. Parts of the facility have been operational since 2024, producing battery modules using externally sourced cells. The start of cell production had always been scheduled for 2025. The joint venture received the crucial operational permit for the cell factory at the end of September 2025, one of the final key steps before the planned commissioning.

By now, cell production is reportedly underway—albeit not for EV batteries but for stationary storage systems. However, it was not always certain that cell production in Windsor would even commence. As a reminder: the construction of the Canadian factory did not proceed smoothly. NextStar Energy halted work on the production site in mid-May 2023. The reason was that the Canadian federal government and the provincial government of Ontario were providing up to 13.7 billion CAD in subsidies for the twice-as-large VW battery factory in St. Thomas.

However, Stellantis and its battery partner LGES had announced the Windsor factory in March 2022, before the Inflation Reduction Act in the USA came into force with its subsidies. The duo was unwilling to accept this disparity and demanded improvements to the public funding. Both sides eventually reached an agreement, allowing Stellantis and LG Energy Solution to resume the suspended construction work in early July 2023.

2,500 jobs expected to be created

To date, the joint venture partners have invested over 5 billion CAD (approximately 3.1 billion euros) in the facility. Currently, more than 1,300 people are employed at the plant, and NextStar has committed to hiring an additional 1,200 employees once full production capacity is achieved. The factory is designed for an annual production capacity of 49.5 GWh. However, whether and when this target will be reached remains uncertain in light of the current acquisition plans.

Both LGES and Stellantis emphasise that the change in ownership represents a “mutually agreed, strategic decision by the joint venture’s two shareholders, LG Energy Solution and Stellantis.” The decision followed intensive discussions with NextStar Energy’s leadership team to “strengthen the company’s long-term growth and investment outlook.” Stellantis also stresses that it will remain a customer and continue to source battery products from NextStar Energy.

“LG Energy Solution sees growth opportunities in North America by situating a key production hub in Canada,” affirms David Kim, Chief Executive Officer of LG Energy Solution. “Full ownership of NextStar Energy will enable us to respond swiftly to the growing demand from the ESS market and position us to play a key role in Canada’s EV industry by securing additional North American-based customers.”

Filosa: “strengthening long-term profitability”

Stellantis CEO Antonio Filosa commented: “By enabling LG Energy Solution to fully leverage the Windsor facility’s capacity, we are strengthening its long-term viability while securing the battery supply for our electric vehicles. This is a smart, strategic step that supports our customers, our Canadian operations, and our global electrification roadmap.”

Danies Lee, CEO of NextStar Energy, also weighs in: “This new ownership structure strengthens Canada’s position as a leader in battery manufacturing. It provides long-term certainty to continue investing in our Canadian workforce and our manufacturing capacity while delivering sustained economic benefits for Canada and Ontario.”

LGES aims to reduce dependence on the automotive industry

For LG Energy Solution, the Windsor plant will become its fourth standalone facility following the completion of the full acquisition. The group already operates three factories in Holland and Lansing (both in Michigan) and Queen Creek (Arizona). Additionally, there are four joint-venture plants in the North American region. LGES’s decision to continue investing in battery cell production in North America, unlike Stellantis, is primarily due to a strategic shift the Koreans made in 2024. At that time, LG Energy Solution announced plans to diversify its business further and reduce its overall dependence on the automotive sector. The company formalised this goal in a new strategy called ‘Empower Every Possibility‘—its first since its founding in late 2020. Another piece of the puzzle was likely the recent sale of a US plant building to Honda.

All of this underscores that LGES is rebalancing its production capacities between electric vehicles and energy storage systems “to minimize new investments while maximizing the utilization of existing production lines worldwide,” as stated. As part of this effort, the company aims to increase its global ESS production capacity to over 60 GWh by 2026, with more than 50 GWh of this capacity focused on North America.

news.lgensol.com, stellantis.com