Stellantis and LG Energy to Build New Battery Factory | Joint Venture

Stellantis and LG Energy Solution Announce Battery Production Deal

Stellantis, created by the merging of Fiat Chrysler Automobiles and Groupe PSA, has entered into a preliminary agreement with LG Energy Solution for the manufacturing of battery cells and modules within North America.

This agreement, pending regulatory approval, forms a key component of Stellantis’ broader strategy. The automaker intends to allocate €30 billion ($34.8 billion) towards electrification and software development through 2025.

Electrification Goals and Capacity

This investment aims to provide electric vehicle (EV) options across Stellantis’ entire U.S. model lineup and achieve specific regional sales targets. The company anticipates EVs representing over 40% of its U.S. sales volume by 2030.

According to CEO Carlos Tavares, the new facility will contribute to Stellantis’ goal of securing a minimum of 260 gigawatt hours of battery capacity by the year 2030.

Toyota Also Announces U.S. Battery Plant

This announcement coincides with Toyota’s declaration of plans to construct its own battery factory within the United States. Toyota Motor North America and Toyota Tsusho revealed intentions to establish an automotive battery plant, with production slated to commence in 2025.

Toyota’s investment in this project will total approximately $1.29 billion through 2031. The company has committed around $3.4 billion to automotive battery development in the U.S. by 2030.

Joint Venture Details

The joint venture between Stellantis and LG Energy will result in the construction of a new facility boasting an annual production capacity of 40 gigawatt hours.

Production is expected to begin in the first quarter of 2024. This capacity is comparable to that of the substantial Panasonic-Tesla gigafactory located in Sparks, Nevada.

Initially, the Panasonic-Tesla Gigafactory was designed for an annual battery production capacity of 35 gigawatt hours.

Factory Location and Timeline

The total cost of the factory and its precise location have not yet been disclosed. The site selection process is currently underway, with an announcement anticipated at a later date.

Stellantis and LG Energy are planning to commence construction on the site during the second quarter of 2022.

Battery Supply and Vehicle Integration

The batteries manufactured at this facility will be supplied to Stellantis. They will be integrated into the production of both plug-in hybrid and fully electric vehicles at the automaker’s assembly plants across the U.S., Canada, and Mexico.

The collaboration between the two companies dates back to 2014. At that time, LG Energy began providing lithium-ion battery pack systems and controls for the Chrysler Pacifica Hybrid.