What happened
Stocks Magna International (NYSE: MGA), a supplier to nearly 60 OEMs, jumped 9% today after announcing a joint venture to electrify the vehicle. The company already has a contract with an electric SUV manufacturer Fisker, and will now join LG Electronics for a new range of electric powertrains.
So what
The companies said in a joint statement that the new venture – to be called the LG Magna e-Powertrain – would produce electric motors and related components, as well as electrically powered systems “to support the growing global shift towards vehicle electrification”.
Image source: Getty Images.
What now
Magna has already signed platform sharing and production agreements with Fisker for its Ocean Electric SUV, which should be produced in the fourth quarter of 2022. LG has been involved in the development of electric vehicle (EV) components for General Motorare the Chevrolet Bolt EV and the Jaguar I-PACE.
The new joint venture will offer electric vehicle manufacturers a range from components to fully integrated electrified powertrains. Magna President and new CEO Swamy Kotagiri said in a statement that the agreement “fully coincides with our strategy to lead electrification”.
There are many moving parts on the way to vehicle electrification. Investors have been increasing stakes in new companies that are not even in production at the moment. It could be an excellent speculative investment, but it should not be lost that established manufacturers like Magna will also play a role in the transition to electric transport.