On Wednesday, auto parts maker Magna International Inc.’s shares reached an all-time peak after signing a partnership with LG Electronics to develop a strategic partnership to develop electric car components. The new business, which will develop inverters, electric motors, as well as on-board chargers, signals Magna’s expansion strategy into the fast-growing demand for electric vehicles. “This collaboration fully conforms to our approach of being at the centre of modernization and assisting car manufacturers with a broad and global portfolio,” Swamy Kotagiri, president of Magna as well as incoming Chief executive, said in a statement. Shares on the Toronto Stock Exchange of the Aurora, Ont.-based business ended up $7.29 or 8.51% at $92.96. Magna says the agreement blends its intensity with LG’s experience in component production for e-motors and inverters in electric powertrain systems and manufacturing. The joint venture has been tentatively dubbed LG Magna e-Powertrain.

Magna and LG’s announcement parallels other attempts by Magna to extend into the electric car parts market. In 2018, the company confirmed two partnerships to engineer and develop electric vehicles with Chinese firms. As electric vehicles rise in popularity, the joint venture’s establishment arrives. The stock of electric vehicle maker Tesla Motors Inc. has been increased by nearly 650% since the beginning of this year, signalling investors’ exuberance about the market. Other big automobile factories, like General Motors, have soon moved to build electric cars. This fall, both Ford Motor as well as Fiat Chrysler stated that at a few of their Canadian plants they are heading toward electric vehicle manufacturing. In recent years, the push has resulted in higher investment in electric car technologies, even by Magna’s rivals.

In 2018, Canadian car parts maker Linamar Corp. announced it would invest $500 million on emerging electric vehicle technology, such as artificial intelligence as well as transmission systems of the next decade. Another Canadian maker of car parts, Martinrea International Inc., has also invested in manufacturing electric vehicle components. In an analyst presentation this year, the firm said it expected that about a quarter of the car industry would be composed of electric cars or hybrids in five years. Magna and LG’s partnership will have more than 1,000 workers based in South Korea, the United States, and China at LG sites. Similar collaborations have become popular in the automotive industry to keep up with the competition. Michael Robinet, who serves as the executive director of the automotive advisory services at IHS Markit, stated.


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