Toyota LG Battery Deal

author: FutureCar Staff    

Toyota has recently announced a significant battery supply deal with LG in the United States. In order to meet the demand for batteries for Toyota's electric cars, LG will invest $3 billion in its Michigan plant.

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 curb inflation. The act includes incentives to boost domestic production of electric vehicles (EVs), batteries, and raw materials.

The batteries provided by LG will be nickel, cobalt, manganese, and alluvium puck-type cells. These batteries will be manufactured at LG's plant in Holland, Michigan. They will then be used in the electric Toyotas that are set to be assembled in the United States, including a model that will be manufactured at the Toyota site in Kentucky, starting production in 2025.

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

This deal between Toyota and LG is the largest single supply agreement signed by LG Energy Solution. LG also has joint ventures with Honda and GM in the United States. Additionally, LG and General Motors are building a separate plant in Lansing, Michigan, with a $2.1 billion investment, to manufacture batteries for GM electric cars.

LG Energy Solution will also supply batteries to five automakers, including Stellantis, Honda, and Hyundai, from its North American plants. According to Reuters, there are currently 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 has an annual production capacity of 6.1 terawatt-hours, according to Benchmark Mineral Intelligence.

In 2025, Toyota plans to open a new battery plant in California in partnership with Panasonic through their joint venture, Prime Plant Energy & Solutions, following a $3.8 billion investment. With these investments and partnerships, Toyota aims to build up to 3.5 million electric cars per year by 2030 and have a lineup of 30 EVs.

Although Toyota was relatively late to the electric car market, their first electric car, the bZ4X, based on the e-TNGA architecture developed by Toyota and Subaru, entered production in April 2022.

FutureCar Staff