A joint venture between LG Electronics and Magna International is close to signing an agreement with Apple to build its electric car – according to an exclusive report by Korea Times.
Sources close to the deal told the paper that “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.” LG officials declined to comment.
The source further added that the first-gen Apple Car will not be for the masses, more of a marketing stunt to boost the marketability of the company and product. Not that it is needed, as any time a rumor is spewed about a partnership with Apple, stocks fly through the rood – as happened with Kia / Hyundai a few months back.
The source added, “Because LG Group affiliates including LG Display, LG Chem, LG Energy Solution and LG Innotek are already included in Apple’s parts supply chain, Apple doesn’t have to worry about any supply chain issues. These LG affiliate are qualified to guarantee production yields and faster delivery of parts needed for Apple EVs.”
Now I’m not sure how that is relevant, as iPhones and Apple Cars obviously vary in part size, and I don’t think Apple will want to risk disrupting the supply chain for their iPhones.
Recently LG Electronics dumped its mobile devices business, probably making way for this venture.
If the agreement is actually happening and signed, then we could see a prototype as early as 2024.
LG Magna e-Powertrain is valued at $1 billion and will be assigned to manufacture e-motors, inverters and onboard chargers. LG will own 51 percent of the new company and Magna, 49 percent. The transaction is expected to close in July, pending LG shareholders’ approval among other conditions. LG has previously supplied motors, battery packs and other components for General Motors’ Bolt EV and to Tesla. Magna already makes automotive electronics for companies.
So, the race is on. If the smartphone business has taught us anything, when Apple announces, others like Huawei, Samsung and Xiaomi will soon follow.