LG and Magna agree to establish joint venture targeting rapidly growing global EV parts market

SEOUL -- South Korea's electronics giant LG Electronics and Canada's mobility technology company Magna International have agreed to establish a joint venture targeting the global electronic vehicle powertrain market that is growing rapidly thanks to the popularization of eco-friendly vehicles.

LG said in a statement on December 23 that the company and Magna will set up a joint venture tentatively called LG Magna e-powertrain to manufacture electric motors (e-motors), inverters and onboard chargers for electric vehicles (EVs). The joint venture will also manufacture electric powertrain systems for certain carmakers, the tech giant said, without disclosing details of the agreement.

LG has been beefing up its EV parts-making capability since 2013 when the company launched a Vehicle Component Solutions division to manufacture infotainment systems and powertrain parts for international carmakers such as Chevrolet and Jaguar. In 2018, LG acquired ZKW, an Austrian headlamp maker, to develop next-generation headlamps using light-emitting diodes (LEDs).

"Manufacturers need to be disruptive to maintain leadership positions in electrification and, through this deal, LG is entering a new phase in its automotive components business, a growth opportunity with enormous potential," LG Electronics' Vehicle Component Solutions division president Kim Jin-yong said.

Magna established in 1957 is a car parts maker that specializes in the production of chassis, powertrains and management software. It will support the joint venture with its software and systems integration capabilities.

"By combining our strengthens, we expect to gain investment efficiency and speed to market with synergies to achieve more, all while continuing to capitalize on the acceleration of the electrified powertrain market," Magna CEO Swamy Kotagiri was quoted as saying.

According to LG, the joint venture will have more than 1,000 employees at offices located in South Korea, the United States and Canada.