LG Electronics and Magna International said today that they have a proposed joint venture to manufacture e-motors, inverters and on-board chargers and, for un-named automakers, e-drive systems to support the growing global shift toward vehicle electrification. The transaction is expected to close in July of 2021, subject to several conditions including obtaining LG shareholder approval and all necessary regulatory approvals. The question in AutoInformed’s opinion is to how many electrification parts and services will be brought in-house by automakers and how much will go to suppliers?
The new company, tentatively called LG Magna e-Powertrain, is said to combine Magna’s strength in electric powertrain systems and automotive manufacturing with LG’s expertise in component development for e-motors and inverters. The stated goal is to hasten both partners’ growth in the electric powertrain market. 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 segment.
LG has established experience in the development of electric vehicle components for the Chevrolet Bolt EV and Jaguar I-PACE. 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. This JV will allow customers to select from a portfolio of reliable components up to integration of an entire electrified powertrain.
“This partnership fully aligns with our strategy of being at the forefront of electrification and supporting automakers with a diverse and world-class portfolio,” said Magna President and incoming CEO Swamy Kotagiri.
The JV will include more than 1,000 employees located at LG locations in the United States, South Korea and China.
“Manufacturers need to be disruptive to maintain leadership positions in electrification and, through this deal, LG is entering a new phase in its automotive components business, a growth opportunity with enormous potential,” said Dr. Kim Jin-yong, President of the LG Electronics Vehicle Component Solutions Company.
Magna is a mobility technology company with more than 157,000 employees and 344 manufacturing operations and 93 product development, engineering and sales centers in 27 countries. With 2019 global sales of $53 billion, LG is a manufacturer of a wide range of products from TVs, washing machines, refrigerators, air conditioners, mobile devices, digital signage and automotive components.