Toyota LG Battery Deal

author: FutureCar Staff    

Toyota has recently announced a significant battery supply deal with LG in the United States. As part of the agreement, LG will invest $3 billion in its Michigan plant to enhance its capacity to provide batteries for Toyota's electric cars.

Starting from 2025, LG Energy Solution will supply Toyota with an annual capacity of 20 GWh. This decision was influenced by the US Inflation Reduction Act, which aims to reduce the federal government budget deficit and inflation by encouraging domestic production of electric vehicles (EVs), batteries, and raw materials.

The batteries supplied by LG will consist of nickel, cobalt, manganese, and alluvium puck-type cells, all manufactured at the LG plant in Holland, Michigan. These battery packs will be used in the production of electric Toyotas assembled in the United States, including a model set to be manufactured at the Toyota site in Kentucky, starting in 2025.

Toyota has ambitious plans to offer a lineup of 30 Toyota- and Lexus-branded electric vehicles by 2030. To support this goal, LG Energy Solution will invest approximately $3 billion in its Michigan plant to establish new production lines for battery cells and modules. These components will then be transported to the Toyota plant in Kentucky, where they will be assembled into battery packs and fitted to the future electric cars.

The partnership between Toyota and LG marks the largest single supply agreement ever signed by LG Energy Solution. LG also has joint ventures with Honda and GM in the United States, including the Ultium battery joint venture, which involves the construction of a separate plant in Lansing, Michigan, with a $2.1 billion investment, to supply batteries for GM electric cars.

Furthermore, LG Energy Solution will supply batteries to five automakers, including Stellantis, Honda, and Hyundai, from its North American plants. Reuters reports that there are currently at least 37 operating or planned battery plants in the United States and Canada, with a combined annual production capacity of 1.3 terawatt-hours, enough to power over 10 million electric cars per year. In comparison, China's annual production capacity amounts to 6.1 terawatt-hours, according to Benchmark Mineral Intelligence.

In 2025, Toyota is set to open a new battery plant in California in partnership with Panasonic, through their joint venture called Prime Plant Energy & Solutions. This venture involves a $3.8 billion investment and aims to support Toyota's production of up to 3.5 million electric cars per year by 2030.

While Toyota is striving to catch up in the electric car market, their first electric car, the bZ4X, based on the e-TNGA architecture developed with Subaru, entered production in April 2022.

FutureCar Staff