Stellantis N.V. and LG Energy Solution (LGES) have entered into a memorandum of understanding to form a joint venture to produce battery cells and modules for North America.
The parties intend that the joint venture will establish a new battery manufacturing facility that will help power Stellantis’ goal of realizing more than 40% of its sales in the U.S. comprised of electrified vehicles by 2030. Targeted to start by the first quarter of 2024, the plant aims to have an annual production capacity of 40 GWh.
The batteries produced at the new facility will be supplied to Stellantis assembly plants throughout the U.S., Canada and Mexico for installation in next-generation electric vehicles (EV) ranging from plug-in hybrids to full-battery EVs that will be sold under the Stellantis family of brands.
“This 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,” states 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 GWh of capacity by 2030.”
“Establishing a joint venture with Stellantis will be a monumental milestone in our long-standing partnership,” says Jong-hyun Kim, president and CEO of LGES. “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 partnership between the two companies in EVs dates back to 2014 when LGES (then LG Chem) was selected by Stellantis (then Fiat Chrysler Automobiles) to supply the lithium-ion battery pack system and controls for the Chrysler Pacifica Hybrid, the industry’s first electrified minivan.
Stellantis plans to invest more than €30 billion through 2025 in electrification and software development, while targeting to continue to be 30% more efficient than the industry with respect to total Capex and R&D spend versus revenues. The location of the new facility is currently under review and further details will be shared at a later date.
The groundbreaking for the facility is expected to take place in the second quarter of 2022. The transaction is subject to agreement on definitive documentation and customary closing conditions, including regulatory approvals.