Technology and consumer goods firm LG Electronics has entered into a joint venture with mobility technology company Magna International.

According to a statement, the joint venture will result in the creation of a new company that will manufacture e-motors, inverters and on board chargers and, for certain automakers, related e-drive systems to support the growing global shift toward vehicle electrification.

The company, which is tentatively called LG Magna e-Powertrain, marries Magna’s strength in electric powertrain systems and automotive manufacturing with LG’s expertise in component development for e-motors and inverters, notes the statement.

“This partnership fully aligns with our strategy of being at the forefront of electrification and supporting automakers with a diverse and world-class portfolio,” says Magna president and incoming CEO Swamy Kotagiri. “By combining our strengthens, we expect to gain investment efficiency and speed to market with synergies to achieve more, all while continuing to capitalise on the acceleration of the electrified powertrain market.”

The market for e-motors, inverters and electric drive systems is expected to have significant growth between now and 2030.

The statement highlights that LG has established experience in the development of electric vehicle (EV), components most notably for the Chevrolet Bolt EV and Jaguar I-PACE.

Therefore, LG is expected to accelerate Magna’s time to market and scale of manufacturing for electrification components, while software and systems integration are competencies that Magna brings to this venture.

“Manufacturers need to be disruptive to maintain leadership positions in electrification and, through this deal, LG is entering a new phase in its automotive components business, a growth opportunity with enormous potential,” says Dr Kim Jin-yong, president of the LG Electronics vehicle component solutions company. “We believe that the combination of our in-house prowess and the experience and extensive history of Magna will transform the EV powertrain space faster than if we proceed alone.”

The joint venture will include more than 1 000 employees at LG locations in the US, South Korea and China.

The transaction is expected to close in July of 2021, subject to a number of conditions, including obtaining LG shareholder approval and all necessary regulatory approvals.