Toyota and LG Energy Solution have inked a strategic supply agreement to ensure a steady supply of lithium-ion batteries for Toyota’s US-manufactured electric vehicles, starting in 2025.
LG Energy Solution is committing a substantial $3 billion investment in its battery facility located in Holland, Michigan. This facility will be dedicated to supplying Toyota’s plant in Kentucky, guaranteeing a seamless flow of lithium-ion batteries for Toyota’s electric vehicles. (via Reuters)
With this new agreement, LG Energy Solution has positioned itself as a battery supplier to five of the world’s top automakers, including Stellantis, Hyundai, and Honda. They will be supplying batteries from their network of eight jointly operated and wholly owned North American plants.
“We’re excited to have Toyota, the best-selling global automaker, as our new customer. 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,” said Youngsoo Kwon, CEO of LG Energy Solution. “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.”
LG Energy Solution is no stranger to forging partnerships. The company is already in collaboration with General Motors in the Ultium battery joint venture, with plans to construct a $2.1 billion plant in Lansing, Michigan, specifically geared towards supplying GM’s expanding electric vehicle lineup.
This collaboration marks the culmination of a wave of investments in new EV battery plants in North America, driven in large part by the U.S. Inflation Reduction Act. Enacted to boost domestic production of electric vehicles, batteries, and raw materials, this legislation has galvanized the automotive industry into action.
The EV battery landscape in North America is rapidly evolving, with at least 37 battery plants in operation or planned in Canada and the US. These facilities boast a collective annual production capacity of 1.3 terawatt-hours, sufficient to power over 10 million electric vehicles each year. In contrast, China currently leads the pack with approximately 291 battery factories, boasting an impressive annual production capacity of 6.1 terawatt-hours.
In line with their commitment to the EV revolution, Toyota and Panasonic are tripling their investment to $3.8 billion in a new battery plant in North Carolina, set to open its doors in 2025. Toyota hopes to produce 3.5 million electric vehicles annually by 2030 and offer 30 different EV models globally under their Lexus and Toyota brands.