Stellantis and LG Energy Solution, announced that their companies have signed a memorandum of understanding to create a new joint venture to produce battery cells and batteries in North America.
The intention of the two Groups is for the joint venture to create a new production plant, which will contribute to Stellantis' goal that by 2030 40% of its US sales will be for electrified models. Scheduled to begin operations in the first quarter of 2024, the new production facility aims to have an annual output of 40 gigawatt hours (gWh).
The batteries produced will supply Stellantis' assembly plants in the U.S., Canada and Mexico for the production of next-generation cars, from plug-in hybrid models to pure electric vehicles sold by the Group's brands.
The new announcement comes on the heels of a recent $229 million investment in the Kokomo complex's casting and transmission systems plants, which will enable production of the 4th generation of the 8-speed automatic transmission that powers the new plug-in hybrid, Jeep Wrangler 4xe and Grand Cherokee 4xe, among others.
"Today's announcement is further evidence of the implementation of the aggressive electrification plan, in line with the commitments we announced at the event EV Day last July", said Carlos Tavares, CEO of Stellantis. "With this development we are creating the next "gigafactory" of Stellantis, which will allow us to achieve the minimum total production capacity of 260 gWh by 2030. I would like to thank everyone involved in this strategically important programme. Together we will lead the automotive industry with leading efficiency and deliver electrified vehicles that will excite."
"The creation of a joint venture with Stellantis is a historic moment for our long-standing cooperation", said Mr. Jong-hyun Kim, President and CEO of LG Energy Solution. "Η LGES will be a supplier of battery solutions for our customers in this region, using its expertise and production capabilities."
The collaboration between the two companies in electrified vehicles began in 2014, when LG Energy Solution (then LG Chem) was selected by Stellantis (then Fiat Chrysler Automobiles) to supply lithium-ion battery systems for the Chrysler Pacifica Hybrid, the world's first electrified minivan. With the new announcement, the two companies further strengthen their partnership.
Stellantis aims to invest more than €30 billion by 2025 in electrification and software development, with the aim of being 30% more efficient than the average automotive industry.
The process for selecting the site for the new facility is currently under evaluation and more information will be announced in the near future. Construction of the new innovative production facility is expected to start in the second quarter of 2022.
The agreement is subject to approval of the final documents and conditions, as well as the relevant regulatory approvals.
