South Korean giant in LG electronics is in the process of shutting down its smartphone business and now the brand is aiming at the growing electronic vehicle supply chain. By the end of July, LG will end up exiting the phone business and will shift its focus towards the EV business.
During the very same month, the company will also spin off its EV drive system segment. Canada’s Magna International – which happens to be one of the world’s leading auto parts suppliers, will end up buying a 49 percent stake in this particular unit so as to create a new joint venture.
The joint venture will then be called LG Magna e-Powertrain – which will be headquartered in Incheon. The company is also in fact preparing so as to establish bases in Michigan, and also Nanjing and hence aiming to secure customer in two countries which of course are major markets for EVs.
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Canada-based Magna’s customers include the likes of General Motors, BMW, and also Ford Motor. Courtesy of the partnership which is to be established with Magna, LG will in fact have a greater potential to supply global automotive leaders.
LG had in fact reported an operating profit in 2015, however, each of the years that followed meant that the company ended up generating losses. Just last year, appliances actually generated 41 percent of the revenue while TVs made up 24 percent. Vehicle components then ended up bringing in $5.1 billion – representing just 11 percent of the total revenue.
However, one would have to imagine that Magna was also likely to have weighed in other factors too when choosing LG as a partner. The South Korean company of course has huge technological strength in core EV components, such as both motors as well as batteries.
Of course durable appliances including the likes of refrigerators as well as air conditioners depend on motors, compressors and also other components for their durability and energy efficiency. LG indeed has long years of independent research and development of inverters.