Toyota Signs Massive Battery Supply Deal With LG In The U.S.

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Toyota has signed an agreement with LG Energy Solution that will provide them with lithium-ion battery modules to be used in forthcoming EVs assembled in the United States.

LG Energy Solution will provide the automotive juggernaut with an annual capacity of 20 GWh starting from 2025. These modules will consist of nickel, cobalt, manganese, and aluminum pouch-type cells that will be manufactured at the firm’s facility in Michigan.

Toyota says that among the vehicles that will use LG battery modules is a new battery-electric vehicle set to be produced at its Kentucky site in 2025. In addition, the supply agreement will form an important part of the firm’s aim to offer 30 battery-electric vehicles globally across the Toyota and Lexus brands by 2030.

“At Toyota, our goal is to reduce carbon emissions as much as possible, as fast as possible,” president and chief executive of Toyota Motor North America Tetsuo Ogawa said. “Having secure supplies of lithium-ion batteries at scale with a long-term relationship to support Toyota’s multi-pathway approach and growth plans for BEVs in North America is critical to achieve our manufacturing and carbon reduction plans. Working with LG Energy Solution, we are excited to be able to offer products that will provide the performance and quality our customers expect.” 

LG Energy Solution will invest approximately $3 billion in its Michigan factory to ensure it can provide Toyota with a steady supply of batteries. It will establish new production lines for battery cells and modules. Battery modules initially supplied by LG will be transported to Toyota’s Kentucky site where they are assembled into battery packs and fitted to the firm’s future EVs.

Read: GM And LG Start Manufacturing EV Battery Cells In Ohio

The deal is the largest single supply agreement LG Energy Solution has secured. In recent times, it has become quite commonplace for carmakers to form joint ventures with battery manufacturers. In fact, LG already has joint venture partnerships with Honda and GM in the U.S.

“We’re excited to have Toyota, the best-selling global automaker, as our new customer,” LG Energy Solution chief executive Youngsoo Kwon added. “With our 30 years of experience in lithium-ion batteries, we will provide innovative power solutions to support Toyota’s push further into battery electric vehicles. The agreement also presents another big opportunity for us to strengthen our production capacity in North America, thereby bringing more real-life, large-scale progress toward electrification in the region.”