LG Energy Solution has struck a memorandum of understanding with Stellantis N.V. to form a joint venture to produce battery cells and modules for Fiat Chrysler Automobiles in North America.
The value of the involved investments was not disclosed, but it is estimated at about 4 trillion won, when the production capacity and the production of battery cells and modules are factored in.
Under the deal, the joint venture will establish a new battery manufacturing facility that will help power Stellantis¡¯ goal of realizing more than 40 percent 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 gigawatt hours.
The batteries produced at the new facility will be supplied to Stellantis assembly plants throughout the US, Canada, and Mexico for installation in next-generation electric vehicles, ranging from plug-in hybrids to full battery electric vehicles that will be sold under the Stellantis family of brands.
Stellantis was established in January following a merger between Fiat Chrysler Automobiles, an Italian-U.S. joint venture, and the French automaker PSA.
Carlos Tavares, CEO of Stellantis was quoted as saying, ¡°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.¡±
¡°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. I want to warmly thank each person involved in this strategic project. Together, we will lead the industry with benchmark efficiencies and deliver electrified vehicles that ignite passion,¡± he said.
Kim Jong-hyun, President and CEO of LG Energy Solution, was quoted as saying, ¡°Establishing a joint venture with Stellantis will be a monumental milestone in our long-standing partnership,¡± ¡°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 electrified vehicles partnership between the two companies dates back to 2014 when LG Energy Solution (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.
With this announcement, the two companies look to solidify their partnership even further and continue leveraging each other¡¯s strengths.
Stellantis plans to invest more than 30 billion euros in electrification and software development through 2025, while targeting to continue to be 30 percent 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.