LG Electronics & Magna International Finalize Agreement for New ePowertrain Joint Venture That's Linked to the Secretive ‘Apple Car' Project
South Korean manufacturer LG Electronics has finalized its new joint venture agreement with automotive supplier Magna International Inc. that will develop e-powertrains and other components for electric vehicles. The new joint venture company will be called "LG Magna e-Powertrain" and will be based in Incheon, South Korea.
The joint venture agreement was approved by LG shareholders in March.
Magna is one of the world's largest suppliers in the automotive industry. The creation of the joint venture will boost its strength in electric powertrain systems as well as automotive manufacturing.
LG will provide its expertise in electric motors and inverters to the joint venture. The two companies will jointly manufacture e-motors, inverters, on-board chargers and related e-drive systems for automakers building electric vehicles, including intelligent operating software and controls.
LG Magna e-Powertrain will be led by CEO Cheong Won-suk, a 20-year LG veteran who most recently served as vice president and head of the LG vehicle component company's Green Business. Prior to LG, Cheong spent almost a decade working on R&D for South Korean automaker Daewoo Motors.
"Partnering with Magna enables LG to scale-up its global production, provide additional business opportunities and offer synergies in procurement and technological innovation," said Cheong. "The integrated and collaborative approach is expected to deliver quickly for customers and capitalize on the rapid growth of the worldwide electric powertrain market."
Javier Perez, who has been with Magna since 2016, will serve as the new company's COO. He will be responsible for overseeing all of the day-to-day operations of the joint venture. Perez brings nearly a quarter century of automotive manufacturing and quality control experience to the LG Magna e-Powertrain joint venture.
"The market for e-motors, inverters and electric drive systems is expected to have significant growth between now and 2030. Our joint venture company brings together experts from Magna and LG to deliver a world-class portfolio of electric solutions," said Perez. "Leveraging existing technologies, engineering capabilities and global footprints, LG Magna e-Powertrain seeks to enable advancements that help automakers achieve some of the biggest challenges ahead in electrifying their full vehicle lineups."
LG Magna e-Powertrain will be made up of more than 1,000 employees in the U.S., South Korea and China.
Will the New LG-Magna Joint Venture Build the Apple Car?
The new joint venture company was linked in April to computer giant Apple Inc's secretive electric car project, dubbed "Project Titan", which Apple CEO Time Cook called the "Mother of all AI projects."
Last December reports began surfacing that Apple was in talks with automaker Hyundai Motor Co to build its Apple Car, but those discussions ended in February with no deal being struck with Hyundai's Kia brand.
Bloomberg reported in February that Apple was also in talks with multiple lidar developers to supply the sensors for its Apple Car project. Lidar sensors are used for perception systems in self-driving vehicles.
Bloomberg also reported that the iPhone maker had already assembled a team of hardware engineers to develop electric drive systems, external vehicle body designs, as well as an interior for Apple's electric vehicle.
However, after reports of Magna and LG being in talks to form a new joint venture were first reported in April, the Korean Times reported that computer giant Apple was "very near" to inking a deal with LG Magna e-Powertrain to build its futuristic Apple Car.
"LG Magna e-Powertrain is very near to signing contracts with Apple under which they could handle the initial volume production of Apple EVs. Contract details are still being discussed," a source familiar with the talks told The Korea Times in April.
LG has previously supplied motors, battery packs and other components to General Motors for the Bolt EV, the electric Jaguar I-PACE SUV, as well for EV pioneer Tesla.
It's worth pointing out that the production volume of the Magna and LG joint venture won't be as large as Apple intended if it turns out to be true. Rather it's mostly intending to use its first-generation EVs as an opportunity to evaluate its marketability, according to the source. But Magna has the capacity to manufacture EVs at scale.
Magna's division Magna Steyr is a contract manufacturer with a factory in Austria that in the past built the first generation BMW X3 SUVs and select Mercedes Benz vehicles equipped with the automaker's 4-Matic all-wheel-drive system. It also builds the electric Jaguar I-PACE.
As automakers around the world grapple with chip shortages, any deal with LG would ensure that Apple will be able to source all of the electronic components its needs to build its long-rumored Apple Car. LG Group affiliates LG Display, LG Chem, LG Energy Solution and LG Innotek, are all current Apple suppliers.
"Apple doesn't have to worry about any supply chain issues. These LG affiliates are qualified to guarantee production yields and faster delivery of parts needed for Apple EVs," a source told the Korean Times in April.
According to The Korea Times report in April, if an agreement is reached, the two parties will jointly establish relevant details for the production of the Apple EV and that a prototype will be unveiled in early 2024.
In June, Reuters reported that Apple was also in early-stage talks with Chinese EV battery manufacturers Contemporary Amperex Technology Limited (CATL) and BYD to build an EV battery factory in the U.S. that could supply batteries to Apple for its EV.
Magna Steyr was recently chosen to build the upcoming Fisker Ocean SUV from EV startup Fisker Inc. But Magna's new joint venture with LG could help it become a major EV component supplier as automakers around the world ramp up the production of electric vehicles.
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