Magna International (NYSE:MGA) stock is taking off on Wednesday after announcing plans to work alongside LG Electronics on electric vehicle (EV) parts.
This partnership has Magna International and LG launching a joint-venture together tentatively called LG Magna e-Powertrain. This company will focus on the manufacturing of e-motors, inverters, onboard chargers, and in some cases e-drive systems.
According to the news release, both companies bring their own advantages to the creation of EV parts. That includes LG having already worked with companies such as Chevrolet and Tata Motorsâ€™Â (NYSE:TTM) Jaguar in the past.
Magna also already has its foot in the door when it comes to EVs. Its experience includes developing parts for Jaguar and it also signed on this year to be the manufacturer of Fiskerâ€™sÂ (NYSE:FSR) Ocean electric SUV.
Magna was also previously tapped to create Appleâ€™s (NASDAQ:AAPL) Project Titan EV. While rumors of the iCar are resurfacing of late, itâ€™s still unclear if Magna will have any hand in its creation.
Swamy Kotagiri, president and incoming CEO of Magna International, said this about the news boosting MGA stock today.
â€œThis partnership fully aligns with our strategy of being at the forefront of electrification and supporting automakers with a diverse and world-class portfolio. By combining our strengthens, we expect to gain investment efficiency and speed to market with synergies to achieve more, all while continuing to capitalize on the acceleration of the electrified powertrain market.â€
Magna International and LG note that this new joint-venture will employ more than 1,000 employees across the U.S., South Korea, and China. The goal is to complete the deal in July 2021 with approval from LG shareholders and regulators.
MGA stock was up 8.1% as of Wednesday morning.
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.