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LG Energy Solution to convert battery joint venture into wholly owned subsidiary

Published: 06 Feb. 2026, 19:56

A view of NextStar Energy in Ontario, Canada [LG ENERGY SOLUTION]

LG Energy Solution (LGES) will convert NextStar Energy, the battery joint venture it set up in Canada with global automaker Stellantis, into a wholly owned subsidiary to expand production capacity amid surging demand for energy storage systems (ESS).

LGES announced in a regulatory filing on Friday that it will acquire Stellantis' 49 percent stake in NextStar for $100. NextStar was established in 2022, with LGES investing about 2.2 trillion won ($1.5 billion) for a 51 percent stake and Stellantis about 1.42 trillion won for the remaining 49 percent.

“The deal effectively allows LGES to secure the plant’s full production capacity for roughly half the original investment,” said an industry source.

The stake purchase reflects aligned interests: LGES needs to scale up output as its ESS business grows, and Stellantis is looking to improve asset efficiency amid a slowdown in electric vehicle demand. NextStar has been producing lithium iron phosphate, or LFP, batteries for ESS since November 2025.

LGES plans to develop NextStar as a forward base for its North American strategy. The company said that it will be able to receive Canadian investment subsidies and production incentives comparable to the U.S. Advanced Manufacturing Production Credit on its own, which it expects will boost competitiveness and profitability.

LGES is the only company producing ESS batteries in North America. With the NextStar plant in Brampton, Ontario, it will have three ESS production hubs in the region, in addition to its plants in Holland and Lansing, Michigan.

The company also aims to roughly double its ESS production capacity by the end of this year to more than 60 gigawatt-hours globally, with North American capacity targeted at over 50 gigawatt-hours. The Canadian plant is expected to raise its utilization rate to more than 70 percent by the end of the year.

LGES added that it will continue to supply EV batteries to Stellantis from the Canadian plant under the existing agreement even after the acquisition.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY KO SUK-HYUN [[email protected]]