LG Electronics Inc. announced in an exchange filing on Wednesday that they are working on launching a joint venture worth 1.1 trillion won ($1 billion) with Canadian automaker technology company Magna International Inc. They partnered with Magna to improve their presence in the international automotive industry.
The South Korean electronics company stated that in the joint venture, they are currently holding a 51% stake, while Magna International holds the remaining 49% stake. With the new partnership temporarily named “LG Magna e-Powertrain,” LG Electronics is settled on a plan to branch out their line of electric car gear, which will be obtained in part by Magna for $435 million.
LG Magna e-Powertrain is expected to manufacture electric car components for Magna’s commissions along with their clients’, in support of the increasing international shift to electricity-powered automobiles.
The joint venture is set to work in factories located in Incheon, Korea and in Nanjing, China, where they will focus on manufacturing electric car motors, inverters, onboard chargers, battery heaters, and electric-drive systems. The partnership will also employ LG’s component enhancement and Magna’s expertise in electric power systems and international networks.
More automotive suppliers are accelerating towards the electrification of their vehicles due to the increasing development in battery technology. With the advance of tighter government regulations on carbon dioxide emissions and gasoline-powered vehicles, automotive producers in the global market are constantly looking for means to garner profit from the growing demand for electric cars.
“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,” said LG and Magna in a news release.
The company announced that they have arranged for a shareholder conference in March 2021 for the review and approval of their plan to begin the joint venture. LG Magna e-Powertrain is preparing to recruit more than 1,000 employees for LG operations in the U.S., South Korea, and China. The deal is anticipated to conclude in July next year.
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