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 Toyota's demand for batteries for their 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 proposes incentives to boost domestic production of electric vehicles (EVs), batteries, and raw materials.

The batteries provided by LG will include nickel, cobalt, manganese, and alluvium puck-type cells. These batteries will be manufactured at the LG plant in Holland, Michigan and will be used in electric Toyotas assembled in the United States.

One of the electric cars that will benefit from this battery supply deal is set to be manufactured at the Toyota site in Kentucky and will enter production in 2025. Toyota has ambitious plans to have a lineup of 30 Toyota- and Lexus-branded electric vehicles by 2030.

LG Energy Solution will invest approximately $3 billion in its Michigan plant to establish new production lines for the 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.

This agreement between Toyota and LG is the largest single supply agreement LG Energy Solution has ever signed. LG also has joint ventures with Honda and GM in the United States, including the Ultium battery joint venture with General Motors, which involves a $2.1 billion investment in a separate plant in Lansing, Michigan.

In addition to supplying Toyota, LG Energy Solution will also provide batteries to other automakers, including Stellantis, Honda, and Hyundai, from its North American plants. The United States and Canada currently have 37 operating or planned battery plants with a combined annual production capacity of 1.3 terawatt-hours, enough to power over 10 million electric cars per year.

Looking ahead, Toyota plans to open a new battery plant in California in 2025, 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 goal of building up to 3.5 million electric cars per year by 2030.

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