In a regulatory filing on Friday, the South Korean battery maker said it would purchase the 49 percent stake held by Stellantis in their joint venture, NextStar Energy Inc., ending the partnership formed in 2022 to build Canada’s first large-scale EV battery plant in Windsor, Ontario. Stellantis however will remain as a customer.
Under the agreement, LGES will take full ownership of the venture by June 30, 2026, acquiring shares for $100 that Stellantis had originally bought for $980 million. LG has committed $1.46 billion to the project and said its investment will continue as planned.
The price reflects the deteriorating outlook for EV demand in North America, where automakers have scaled back expansion plans amid weaker sales and the rollback of U.S. consumer tax incentives.
LGES said the ownership change would allow it to realign the facility toward a broader customer base, including energy storage systems (ESS), as automakers cut battery orders.
Company officials in Seoul said the move reflects a strategic shift away from reliance on a single carmaker and toward fast-growing demand from data centers and renewable energy projects.
One production line at the Windsor plant has already been converted for ESS manufacturing, with LG targeting utilization of more than 70 percent by year-end. The facility’s full capacity stands at about 49.5 gigawatt-hours annually.
The pivot follows the cancellation of a $6.5 billion EV-related supply deal with Ford Motor late last year and mirrors similar conversions at LGES’ U.S. plants in Michigan.
The restructuring comes as Canada intensifies efforts to protect its auto sector and attract non-U.S. investment, amid trade tensions with Washington and uncertainty over the future of North American supply chains.
Prime Minister Mark Carney’s government has rolled out incentives tied to domestic production and revived EV purchase subsidies to stabilize the industry after major cutbacks by automakers.
Last year, U.S. President Donald Trump imposed 25 percent tariffs on Canadian vehicles and parts, dealing a major blow to exports and accelerating streamlining of Canadian operations by carmakers including Stellantis which has moved production of its Jeep Compass model from Ontario to Illinois.
Canadian officials now say the ability of foreign partners to deliver broader industrial benefits — beyond a single project — is becoming central to Ottawa’s investment strategy.
The battery plant deal is also being watched closely in Seoul and Berlin, as Canada evaluates bids for its multibillion-dollar Canadian Patrol Submarine Project (CPSP).
Stephen Fuhr, Canada’s special envoy for defense procurement, said during a recent visit to South Korea that automotive and advanced manufacturing cooperation would weigh heavily in the final decision.
“If there are areas where we can cooperate in sectors like automobiles, we are looking to pursue broader partnerships that go beyond defense,” Fuhr said after touring facilities operated by Hanwha Ocean.
Analysts observe LGES' deeper commitment to Canadian manufacturing may strengthen South Korea’s case by reinforcing long-term industrial ties at a time when Ottawa is seeking to reduce dependence on U.S.-based supply chains.
For LGES, full control of NextStar offers operational freedom and access to generous Canadian production subsidies. For Ottawa, it preserves a flagship manufacturing asset while reinforcing its pitch for foreign partners willing to invest across multiple sectors.
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