Known for its electronic products, LG is challenging itself for electric vehicle market through a joint venture with Magna International Inc. Both companies are ready to go all-in to serve as “a new alternative to Tesla stock for investors.”
The joint venture between LG and Magna
Earlier today, Bloomberg reported that LG and Magna are joining as LG Magna e-Powertrain. Magna is set to own a 49% stake worth 501.6 billion won ($453 million) in the new company and LG owning the remaining stake. Accordingly, LG broke its growth record with the joint venture news by soaring 29.6%.
LG Magna e-Powertrain will focus on producing e-motors, inverters and electric drive systems. LG Electronic’s battery heater and power relay assembly division will also be included in the joint venture’s electronic vehicle components. Bloomberg‘s source said that LG’s factories in Incheon, Korea and Nanjing, China will be involved in the manufacture of the electric vehicle parts.
Why the electric vehicle market?
LG and Magna are confident in the electronic vehicle market future growth. Through a joint media release, the companies said to expect “to have significant growth between now and 2030, and the JV (joint venture) will target this fast-growing global market with a world-class portfolio,” Bloomberg quotes. The new company will further receive orders from Magna and its clients.
Furthermore, the urgency to shift into sustainable electric vehicles has shaken the global automotive market. Stricter regulation controlling gasoline usage for cars, as well as policies and grants given by the governments for electric vehicle productions, boosted the change even more. Tesla Inc. has been in the competition along with Chinese startups such as Nio Inc. and XPeng Inc.
The joint venture between LG and Magna has gone through a meticulous calculation. While LG’s factories are taking care of the electrification components manufacture, Magna will focus on software and systems integration.
LG Magna e-Powertrain will have more than 1,000 employees in three different locations: the United States, South Korea and China. A source told Bloomberg that both companies expect to finish the transaction in July.
Read also: Step Up from China’s Baidu: Making an Electric Vehicle
Follow and join us on Youtube, Instagram, Facebook, and Twitter to be part of the trader community in Asia
