By Heekyong Yang and Joyce Lee
SEOUL (Reuters) -South Korean battery giant LG Energy Solution Ltd (LGES) said on Wednesday it plans to invest $1.5 billion to set up a joint venture with Stellantis NV in Canada.
LGES owns 51% of the joint venture, tentatively named "LGES-STLA JV" and Stellantis owns 49%, LGES said in a regulatory filing.
The South Korean battery maker added that its board approved a guarantee of debt regarding its joint venture with Stellantis, which stands at $627 million.
In October, LGES and Stellantis NV struck an electric vehicle (EV) battery production joint venture, targeting to start production by the first quarter of 2024 and aiming to have an annual production capacity of 40 gigawatt hours of batteries.
In a separate regulatory filing, LGES said it plans to acquire a stake worth $542 million in ES America to respond to demand from EV startups in the United States.
LGES is considering building a factory in Arizona to meet demand in the United States, two people familiar with the matter told Reuters, adding that the plant is expected to primarily produce cylindrical battery cells. LGES has its own factory in Michigan and two battery joint ventures with General Motors Co (NYSE:GM) in Ohio and Tennessee.
"We are considering a new production site, but nothing has been decided yet," said a spokesperson at LGES.
LGES, which counts Tesla (NASDAQ:TSLA) Inc, GM and Volkswagen AG (OTC:VWAGY) among its customers, currently has battery production sites in the United States, China, Poland, Indonesia and South Korea.
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