Magna International and LG Electronics have announced a joint venture to make various important components for electric vehicles.

The joint venture is tentatively known as LG Magna e-Powertrain will be formed in July next year and be 51 per cent owned by LG and 49 per cent owned by Magna. This company will produce electric motors, inverters, and on-board chargers, aiming to combine them into a single unit, also known as an e-axle system.

According to the companies, the joint venture will use Magna’s strength in electric powertrain systems and its global supply network with LG’s expertise in component development for electric motors and inverters. Reuters reports that the joint venture will be based in Incheon, South Korea but also employ people in the U.S. and China.

The JV will include more than 1,000 employees located at LG locations in all three countries. All that’s needed to finalize the joint venture is LG shareholder approval.

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“This partnership fully aligns with our strategy of being at the forefront of electrification and supporting automakers with a diverse and world-class portfolio,” Magna president and incoming chief executive Swamy Katagiri said in a statement. “By combining our strengths, 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.”

“Manufacturers need to be disruptive to maintain leadership positions in electrification and, through this deal, LG is entering a new phase in its automotive components business, a growth opportunity with enormous potential,” added president of the LG Electronics Vehicle Component Solutions Company, Dr. Kim Jin-yong. “We believe that the combination of our in-house prowess and the experience and extensive history of Magna will transform the EV powertrain space faster than if we proceed alone.”