Toyota's Bold EV Strategy: Partnering with LG for Batteries

author: FutureCar Staff    

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Here at CleanTechnica, we have been critical of Toyota in recent years. While the company initially made strides in hybrid technology, it failed to keep up with the industry's shift towards full electric vehicles (EVs). Toyota even ran ads downplaying EVs and promoting hybrids as "self charging." However, even Toyota had to acknowledge the changing landscape as other Japanese automakers abandoned hybrids and hydrogen.

Toyota's response was to announce yet another development in solid-state batteries. However, this move was met with skepticism from EV enthusiasts who saw it as a stalling tactic rather than a genuine commitment to EVs. But in a recent press release that received little attention, Toyota made a surprising move: the company placed an order for regular lithium-ion battery modules from LG Energy Solutions.

Under the supply agreement, LG Energy Solutions will provide automotive battery modules to support Toyota's expanding line of EVs. The modules will be manufactured in LG Energy Solution's Michigan facility and will have an annual capacity of 20GWh starting from 2025. This collaboration aligns with Toyota's goal of offering 30 EV models globally and producing up to 3.5 million EVs annually by 2030.

Tetsuo "Ted" Ogawa, president and CEO of Toyota Motor North America, emphasized the company's commitment to reducing carbon emissions and highlighted the importance of secure supplies of lithium-ion batteries to achieve their manufacturing and carbon reduction plans. Working with LG Energy Solution, Toyota aims to provide high-performance and quality products to meet customer expectations.

To fulfill the battery supply agreement, LG Energy Solution plans to invest $3 billion in its Michigan facility. The investment will be used to establish dedicated production lines for battery cells and modules exclusively for Toyota. Initially, the battery modules will be delivered to Toyota Motor Manufacturing Kentucky, where they will be assembled into battery packs for installation in full EVs.

The collaboration between LG Energy Solution and Toyota aims to leverage their expertise in battery manufacturing and advanced technologies to create a high-performance battery system. LG Energy Solution's focus on battery safety and thermal management is expected to optimize battery system performance.

It's worth noting that the batteries being supplied by LG Energy Solutions are not groundbreaking or exotic. They are standard high-nickel NCMA batteries that other companies are also using. However, this deal signifies Toyota's commitment to building EVs in volume rather than making promises for the future.

Youngsoo Kwon, CEO of LG Energy Solution, expressed excitement about having Toyota as a customer and highlighted their 30 years of experience in lithium-ion batteries. The agreement also presents an opportunity for LG Energy Solution to strengthen its production capacity in North America and contribute to the region's electrification progress.

This deal marks LG Energy Solution's largest single supply agreement and solidifies its position as a battery supplier to the top five global car manufacturers. The company has multiple battery manufacturing facilities in North America and plans to further expand its production network and supply chains.

This announcement differs from Toyota's previous solid-state battery claims as it involves a real battery company that supplies other automakers. It shows that Toyota is taking EVs seriously this time and is not just paying lip service. While Toyota still believes in the potential of solid-state battery technology, it is not waiting for it to become available before entering the EV market in North America.

This move by Toyota also reflects the growing seriousness of the North American market for EVs. The company wouldn't have made this deal and committed to EVs if it didn't see a real market demand and if there were alternative pathways that didn't involve building EVs. With several states moving towards banning the sale of new internal combustion engine vehicles, including hybrids, it is clear that the United States and Canada are fully embracing EVs.

The next question is what Toyota's EV offerings in the North American market will look like. Will they continue with underwhelming models like the bZ4X, or will they introduce high-quality EVs that can drive significant sales? Further announcements from Toyota will provide insights into their actual EV strategy.

Featured image provided by LG and Toyota.

FutureCar Staff