Magna Shares Spike On Report Of Joint Venture With LG For Apple Electric Vehicle: What Investors Should Know

One of the most anticipated contracts of 2021 could be the manufacturers of Apple’s planned electric vehicles.

A Magna International MGA and LG joint venture could come out the winner, according to a report from The Korea Times. 

What Happened: A joint venture between Magna International and LG tentatively named LG Magna e-Powertrain is nearing a deal for Apple’s AAPL electric vehicle project, according to The Korea Times.

“LG Magna e-Powertrain is very near to signing contracts with Apple under which they could handle the initial volume production of Apple EVs,” a source told The Korea Times.

The first-generation release of the Apple electric vehicle could have smaller numbers and be used to evaluate the marketability of the brand.

LG Display, LG Chem and LG Energy are already in Apple’s parts supply chain, which could help the technology giant with concerns over supply chain issues.

The LG Manga e-Powertrain joint venture would be 51% owned by LG and 49% owned by Magna.

A prototype Apple car could be released in 2024, the report said. 

Related Link: LG Exits Mobile Phone Market: What You Need To Know

Why It’s Important: LG Electronics abandoned its handset business and is seeing investors push for the company to enter vehicle-related businesses.

“As the LG brand is not that strong in the global EV industry, it needs a pretty competitive reference to show off its transformation efforts,” a source told The Korea Times.

Magna makes automotive electronics for companies and has pushed into more vehicle production for its partners. The company is working with Fisker Inc FSR on its Ocean SUV production.

Magna also signed a deal with REE Automotive and is an investor in the company going public via a SPAC merger with 10X Capital Venture VCVC.

REE Automotive is set to provide a modular EV with Magna International and supply it to partners.

MGA Price Action: Shares of Magna International were trading 2.88% higher to $92.07 at last check Tuesday. 

Disclosure: Author is long shares of FSR.