LG Energy Solution, Stellantis, and NextStar Energy have jointly announced that LG Energy Solution will acquire complete ownership of NextStar Energy through purchase of Stellantis’s 49 percent equity stake, fundamentally restructuring the ownership of Canada’s first large-scale battery manufacturing facility.
The transaction transforms what was established as joint venture partnership in 2022 into wholly-owned LG Energy Solution subsidiary while maintaining the facility’s strategic role building resilient and competitive foundation for Canada’s battery manufacturing ecosystem.
The ownership transition represents mutually agreed strategic decision by both shareholders rather than contentious divestiture or financial distress situation, with the announcement emphasizing collaborative nature of the restructuring.
The decision was informed by extensive engagement with NextStar Energy’s leadership team to ensure seamless operational transition and strengthen the company’s long-term growth trajectory and investment outlook beyond what joint venture structure could provide.
Strategic Rationale Emphasizes Market Agility and Customer Base Expansion
Under the new ownership structure, NextStar Energy will leverage LG Energy Solution’s technological leadership accumulated through years of battery chemistry research and global operational expertise developed across multiple manufacturing facilities worldwide.
This enhanced capability integration aims to better serve broader customer base extending beyond automotive applications to include Energy Storage System industry, which represents rapidly growing market segment for stationary battery deployments supporting renewable energy integration and grid stabilization.
The restructuring enables NextStar Energy to respond with greater agility to evolving market conditions and demand fluctuations without requiring consensus between joint venture partners with potentially diverging strategic priorities.
Single-owner decision-making authority accelerates response times for capacity allocation adjustments, technology implementation decisions, and customer relationship development that might face delays under joint venture governance requiring bilateral agreement.
The ability to pursue future growth opportunities proves particularly important given dynamic battery market evolution where demand patterns shift rapidly based on electric vehicle adoption rates, energy storage deployment acceleration, and emerging applications in sectors including robotics, urban aerial mobility, and maritime electrification.
Sole ownership provides NextStar Energy with flexibility to pivot production focus and customer mix matching market opportunities without joint venture partner approval constraints.
Stellantis Maintains Strategic Supply Relationship Despite Ownership Exit
Critically, Stellantis remains committed customer and will continue sourcing battery products from NextStar Energy despite divesting its ownership stake.
This supply relationship continuation ensures Stellantis maintains access to battery production capacity essential for its North American electric vehicle manufacturing operations while eliminating equity investment exposure and joint venture governance responsibilities.
Antonio Filosa, Chief Executive Officer of Stellantis, characterized the transaction as smart, strategic step supporting the company’s customers, Canadian operations, and global electrification roadmap.
He emphasized that enabling LG Energy Solution to fully leverage the Windsor facility’s capacity strengthens its long-term viability while securing battery supply for Stellantis electric vehicles, framing the ownership exit as enhancement rather than retreat from electrification commitments.
The customer relationship preservation proves essential for both parties. Stellantis secures predictable battery supply from geographically proximate manufacturing facility supporting its North American vehicle production without capital tied up in battery manufacturing assets outside its core automotive competency.
LG Energy Solution maintains significant anchor customer providing baseline production volume supporting facility economics while gaining freedom to serve additional customers without potential conflicts of interest inherent in automotive manufacturer co-ownership.
This supply-without-ownership model increasingly characterizes automotive industry battery sourcing strategies as automakers recognize that capital-intensive battery manufacturing requires specialized expertise and global scale difficult to achieve through captive operations or joint ventures with single-customer focus.
By transitioning to pure customer relationships, both Stellantis and LG Energy Solution optimize their respective strategic positions.
NextStar Energy Facility Represents Cornerstone of Canadian Battery Manufacturing
NextStar Energy’s Windsor, Ontario facility is characterized as cornerstone of Canada’s advanced manufacturing and clean-energy sector, anchoring domestic battery production capability that previously did not exist at meaningful scale within Canadian borders.
The facility strengthens North America’s battery supply chain by establishing production capacity within the USMCA trade region, supporting Canada’s long-term industrial competitiveness in strategic battery manufacturing sector critical for automotive and energy industries.
More than $5 billion CAD has been invested in the facility to date, representing massive capital commitment reflecting battery manufacturing’s capital-intensive nature requiring sophisticated production equipment, cleanroom environments, and extensive quality control infrastructure.
The facility currently employs over 1,300 workers with long-term target of 2,500 employees as production scales to full capacity, providing substantial direct employment plus indirect economic benefits through supplier relationships and community spending.
Danies Lee, Chief Executive Officer of NextStar Energy, emphasized that the new ownership structure strengthens Canada’s position as leader in battery manufacturing while providing long-term certainty to continue investing in Canadian workforce and manufacturing capacity.
This leadership positioning proves strategically significant for Canada as developed economies compete to secure positions in battery supply chains previously dominated by Asian manufacturers, with substantial government support justifying the competitive pursuit of battery manufacturing capabilities.
The facility will continue playing pivotal role strengthening Canada’s and North America’s battery manufacturing ecosystem by onshoring critical capabilities meeting evolving needs of automotive manufacturing sector and other strategic industries.
This onshoring emphasis responds to supply chain vulnerability concerns exposed during recent disruptions and geopolitical tensions that highlighted risks of concentrated overseas manufacturing dependency for technologies essential to economic and national security.
LG Energy Solution Consolidates North American Manufacturing Leadership
David Kim, Chief Executive Officer of LG Energy Solution, articulated that the company sees substantial growth opportunities in North America by situating key production hub in Canada.
Full ownership of NextStar Energy will enable swift response to growing demand from the ESS market while positioning the company to play key role in Canada’s EV industry by securing additional North American-based customers beyond the Stellantis anchor relationship.
Upon completion of this acquisition, LG Energy Solution will operate four stand-alone facilities including LG Energy Solution Michigan Holland, LG Energy Solution Michigan Lansing, LG Energy Solution Arizona, and NextStar Energy, plus four joint venture facilities in the North American region.
This extensive manufacturing footprint establishes LG Energy Solution as the largest battery company in North America with the most diverse manufacturing presence spanning multiple customers, use cases, battery chemistries, and cell formats.
The manufacturing diversity proves strategically valuable because different applications require varying battery specifications. Electric vehicles demand high energy density optimizing range, while energy storage systems prioritize cost efficiency and longevity over energy density.
Different chemistries including nickel-cobalt-manganese (NCM), lithium-iron-phosphate (LFP), and emerging formulations serve distinct market segments with varying performance and cost profiles.
LG Energy Solution’s ability to manufacture diverse battery types across multiple facilities provides competitive advantage serving varied customer needs without forcing compromise solutions attempting to apply single battery specification across incompatible applications.
This manufacturing flexibility combined with geographic distribution across multiple North American sites reduces concentration risk while positioning facilities near major automotive manufacturing clusters and strategic energy storage deployment regions.
Strategic Portfolio Rebalancing Between EV and Energy Storage Applications
As the global battery market expands beyond electric vehicles into diverse sectors including energy storage systems, robotics, urban aerial mobility, and maritime applications, LG Energy Solution is strategically rebalancing its production portfolio and enhancing operational efficiency.
The company is reallocating production capacity between EV batteries and Energy Storage Systems to minimize requirements for new capital-intensive facility investments while maximizing utilization of existing production lines worldwide.
This strategic shift aims to increase global ESS production capacity to over 60 gigawatt-hours (GWh) this year, with more than 50 GWh of this capacity concentrated in North America.
The ESS capacity expansion responds to accelerating stationary battery storage deployments supporting renewable energy integration, utility-scale grid storage projects, and commercial/industrial energy management systems seeking to reduce electricity costs and enhance energy resilience.
The production rebalancing strategy proves financially prudent because leveraging existing manufacturing infrastructure for energy storage production avoids multi-billion-dollar capital expenditures required for greenfield battery plants.
While ESS and EV batteries differ in specifications, fundamental manufacturing processes share sufficient commonality enabling production line adaptation for dual-purpose capability or seasonal allocation matching demand patterns.
Energy storage systems represent particularly attractive growth market because deployment drivers extend beyond consumer adoption decisions to include utility investment requirements, renewable energy intermittency solutions, and grid modernization imperatives driven by aging infrastructure and electrification trends.
These institutional and infrastructure drivers potentially provide more predictable long-term demand compared to consumer EV adoption subject to economic cycles, fuel price fluctuations, and shifting preferences.
Transaction Structure and Regulatory Approval Requirements
The closing of this transaction is subject to approvals and other conditions, standard language indicating that final consummation depends on satisfying regulatory requirements and contractual conditions precedent.
In battery manufacturing acquisitions involving facilities receiving substantial government support, regulatory approvals typically include review by competition authorities ensuring the transaction doesn’t create anticompetitive market concentration, plus foreign investment screening examining national security implications of ownership changes in strategic industries.
The Canadian facility benefited from significant federal and provincial government financial support justified by strategic importance of establishing domestic battery manufacturing capability.
Government approvals may involve confirming that ownership transfer doesn’t compromise commitments regarding employment levels, production capacity, technology transfer, or other conditions attached to original financial incentives provided to the joint venture.
The transaction structure transferring Stellantis’s 49 percent stake to LG Energy Solution rather than involving third-party acquirers simplifies approval processes because LG Energy Solution already holds majority ownership and operational control.
The change merely consolidates ownership under existing majority partner rather than introducing new stakeholder potentially raising novel concerns about facility operation, technology access, or strategic direction.
Implications for North American Battery Supply Chain Development
The transaction carries significant implications for North American battery supply chain evolution as the region pursues strategic objective of reducing dependence on Asian battery manufacturers and establishing resilient domestic production capability.
LG Energy Solution’s consolidation of NextStar Energy ownership potentially accelerates facility capacity expansion and customer diversification by eliminating joint venture governance complexities that might slow decision-making.
For Canada specifically, the transaction validates the country’s strategy of attracting battery manufacturing investment through financial incentives, skilled workforce availability, proximity to U.S. automotive markets, and stable business environment.
Success attracting and retaining major battery manufacturing operations encourages additional supply chain investment in upstream materials processing and downstream manufacturing supporting Canada’s aspiration to develop complete battery value chain rather than merely final assembly operations.
The Stellantis ownership exit while maintaining customer relationship may signal broader industry trend toward specialization where automakers focus capital on core vehicle design and manufacturing while sourcing batteries from specialized suppliers achieving economies of scale serving multiple customers.
This specialization trend contrasts with vertical integration strategies where automakers develop captive battery operations, with market dynamics likely supporting both models serving different strategic objectives and risk tolerances.
For LG Energy Solution, the transaction reinforces positioning as independent battery supplier serving diverse customers across automotive and energy storage sectors, differentiating from competitors more closely tied to specific automotive manufacturers or focused narrowly on single application categories.
This broad market positioning potentially provides more stable long-term growth trajectory compared to dependence on individual automaker success or single-sector demand patterns.