Magna – The Most Important EV Startup You Probably Haven’t Heard Of
By Edward A. Sanchez – Aug. 1, 2021
The names most often in the headlines when it comes to the rapidly growing world of EVs are typically Tesla, General Motors, Volkswagen, Volvo, and more recently Lucid and Rivian. All of these companies’ efforts in the area of electrification are laudable and worthy of recognition. But in the broader automotive universe, there are hundreds, if not thousands of smaller supplier companies in the area of sub-assemblies, safety equipment, electronics, and other components. And to those in the know, one of the biggest is Magna.
Founded in 1957 in Aurora, Ontario, by Austrian immigrant Frank Stronach, Magna is now one of the largest companies in Canada, and one of the largest Tier 1 automotive suppliers in North America and globally.
Being a veteran of automotive journalism for more than two decades, I’ve known about Magna for a while, primarily in the context of supplying all-wheel-drive systems, various other automotive powertrain and chassis components, and as one of the world’s leading contract manufacturers. If you’ve followed The Watt Car blog and podcast for any length of time, you’ll know that I’ve mentioned the company more than once, and keyed readers and listeners into the potential role the company could play in an electrified automotive future.
Over the last few weeks, a few significant developments have taken place involving the company that demonstrates the company’s strategy and growing emphasis on the EV space. The first is the company’s acquisition of Swedish advanced safety systems company Veoneer, itself a spinoff from Autoliv, a leading manufacturer of seatbelts, airbags, and passive safety electronics. Veoneer’s specialty is automotive cameras and active safety systems. Although not strictly EV related, you will see how strategically Veoneer’s incorporation into the Magna fold dovetails perfectly with the company’s bigger-picture plans.
The second big development is the announcement of a joint venture with Korean electronics giant LG in the area of EV powertrain development. The joint-venture, named LG Magna e-Powertrain, will be based in Incheon, South Korea, and will have offices in South Korea, China, and the United States. The company will specifically focus on the development of e-motors, inverters, and electric drive systems.
Don’t forget that LG is also one of the global leaders in EV batteries, supplying such cars as the Audi e-tron, Chevrolet Bolt, Mustang Mach-E, and Jaguar I-Pace, among others.
Coincidentally, Magna manufactures the Jaguar I-Pace at its plant in Graz, Austria, under contract with Jaguar Land Rover. It has also been the exclusive manufacturer of Mercedes-Benz’s iconic G-Wagen SUV since its introduction in 1979. It also built the Sony Vision-S concept car that debuted at CES 2020.
“Impressive,” you say. “But so what?”
Well, consider all the dozens of EV startups globally. Building a greenfield factory from the ground up is expensive and time-consuming, not to mention risky, if you don’t have a clear view of what demand will be for your product. Which is one of the reasons Fisker is commissioning Magna to build its upcoming Ocean EV SUV. If your volume targets on a new model are in the tens of thousands rather than the hundreds of thousands, at least initially, Magna would be the perfect company to partner with.
Fisker recently inked a deal for Magna to produce the Ocean. (Image courtesy Fisker)
The company has the capability to design, engineer and manufacture a vehicle essentially from the ground up. Typically, clients come to Magna with their own styling concept, allowing Magna to do the rest. Magna’s acquisition of Veoneer will fit perfectly into a future in which autonomous driving becomes less science fiction and more reality.
There will be many casualties along the path toward full electrification. Some of the startups won’t make it over the long term, or will be acquired by bigger, healthier companies. But at least from my vantage point, Magna is poised to be the big winner in this scenario by offering a soup-to-nuts, asset-light model to whatever company wants to get off to a quick start without having to raise or spend tens of billions of dollars.
So while Tesla, Lucid, and others may be hogging the EV headlines lately, keep an eye on the below-the-radar, but very significant player: Magna.
(Main image courtesy Magna)
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