LG Electronics and Magna Electric Vehicle Powertrain Joint Venture… Scheduled to be launched next July

[CBC뉴스] LG Electronics and Canada Magna International (‘Magna’), the world’s third-largest auto parts maker, announced that they have decided to establish a joint venture in the field of electric vehicle powertrain (power transmission system).

The head office is located in Incheon, and it is said that 1,000 employees related to part of the green business will move to the joint venture.

LG Electronics held an extraordinary board meeting on the 23rd and decided to split the material and establish a joint venture for some of the green businesses in the VS headquarters. LG Electronics, a spin-off company, will have 100% of the stake in the new spin-off company, and Magna will take over 49% of the spin-off company. The acquisition amount is 453 million dollars (approximately 501.6 billion won).

The joint venture will be officially launched around July when approval for the physical division and establishment of a joint venture is achieved at the general shareholders’ meeting scheduled for March next year.

Magna is a mobility technology company founded in 1957. Magna is one of the world’s largest auto parts makers and ranked third in the world in terms of sales last year.

LG Electronics and Magna are a joint venture called’LG Magna E-Powertrain’ to increase business competitiveness and growth potential by establishing a mass-production system that can enjoy economies of scale as the automobile electrification trend is rapidly progressing in the global market. LG Magna e-Powertrain Co., Ltd.)’ (tentative name) was established.

Some of the green businesses that are divided are motors, inverters, and vehicle chargers for electric vehicles, as well as drive systems (products with modularized motors, inverters, and reducers).

LG Electronics decided to split the material in order to focus more on the electric vehicle powertrain business and increase its business competitiveness. In addition, it was judged that the joint venture’s independent and prompt decision-making was the best way to maximize its growth potential.

Magna has a wealth of business experience and engineering capabilities, including the design and verification of integrated systems in the powertrain field, including a global customer network. In addition, LG Electronics has technology and manufacturing competitiveness for motors and inverters, which are key parts of electric vehicle powertrains.

LG Electronics and Magna expect that the strengths of both companies will create the best synergy and contribute to the advancement of the business of the joint venture in a situation where the eco-friendly vehicle and electrification parts market is growing rapidly.

The joint venture will be able to expect new orders from Magna as well as from Magna’s customers, thereby establishing a mass production system early and realizing economies of scale.

Previously, LG Electronics was recognized for its technological prowess by supplying major parts for electric vehicles such as Chevrolet Bolt EV and Jaguar I-PACE.

Meanwhile, looking at the history of LG Electronics’ auto parts business, it acquired V-ENS, an automobile parts design engineering company, in May 2013, and the VS business division (then VC business division) was established in July.

In August 2018, we acquired ZKW, an Austrian automotive headlamp company (70% LG Electronics, 30% LG Co., Ltd.), and transferred the lamp business within the VS division to ZKW in December 2019, and LG Magna E-Powertrain (tentative name) in July 2020 A joint venture was launched.

The scale of the global eco-friendly automobile market is 206 million in 2021, 28.4 million in 2022, 37.3 million in 2023, 47.4 million in 2024, and 56.6 million in 2025.

CBC NewsㅣCBCNEWS Reporter Shim Woo-il [email protected]

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