Toyota's EV Partnership With LG

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【Summary】Toyota has signed a deal with LG Energy Solutions for the supply of regular lithium-ion battery modules for its upcoming EVs in the US. The collaboration aims to support Toyota's goal of offering 30 EV models globally and producing up to 3.5 million EVs annually by 2030. LG Energy Solution plans to invest $3 billion in its Michigan facility to supply the batteries, with completion expected by 2025.

FutureCar Staff Oct 17, 2023 4:16 PM PT

Here at CleanTechnica, we have been critical of Toyota in recent years. The company initially embraced hybrid technology, but while the rest of the industry moved towards full electric vehicles (EVs), Toyota stuck with hybrids and even ran ads downplaying the importance of EVs. However, even Toyota had to eventually acknowledge the shift towards EVs.

Toyota then made another announcement about solid-state batteries, which many EV enthusiasts saw as a stalling tactic rather than a genuine commitment to EVs. However, in a recent press release, Toyota did something unexpected: they placed an order for regular lithium-ion battery modules from LG Energy Solutions for use in their upcoming EVs in the US.

Under the supply agreement, LG Energy Solution will provide automotive battery modules to support Toyota's expanding line of EVs. These modules will be manufactured in LG Energy Solution's Michigan facility, with an annual capacity of 20GWh starting from 2025. The collaboration between Toyota and LG Energy Solution 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 importance of secure supplies of lithium-ion batteries to achieve Toyota's carbon reduction plans. He expressed excitement about the collaboration with LG Energy Solution, highlighting their commitment to providing high-performance and quality products to meet customer expectations.

To meet the battery supply agreement, LG Energy Solution plans to invest approximately $3 billion in its Michigan facility. This investment will 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 combine their expertise in battery manufacturing and advanced technologies to create a high-performance battery system that enhances the customer experience. LG Energy Solution's focus on battery safety and thermal management is expected to optimize the battery system's performance.

It is important to note that the batteries being supplied by LG Energy Solution are not groundbreaking or exotic. They are regular high-nickel NCMA batteries that are commonly used by other automakers. The significance lies in Toyota's commitment to building EVs in volume rather than just making promises for the future.

Youngsoo Kwon, CEO of LG Energy Solution, expressed excitement about having Toyota as a customer and their opportunity to support Toyota's push into battery electric vehicles. He emphasized that this agreement strengthens LG Energy Solution's production capacity in North America and contributes to the region's electrification progress.

This deal marks LG Energy Solution's largest single supply agreement and signifies their battery supply to all of the top five global car manufacturers. The company currently operates or is constructing eight battery manufacturing facilities in North America, with plans for further expansion.

This announcement from Toyota is different from their previous solid-state battery announcements. It demonstrates a serious commitment to EVs, as it involves a real battery company that supplies other automakers. It indicates that Toyota is taking EVs seriously this time and not just delaying their EV plans. Toyota still believes in the potential of solid-state battery technology but is not waiting for it to become available before entering the North American EV market.

This deal also reflects the seriousness of the North American market for EVs. Toyota would not have made this commitment if they did not believe in the market potential and if they thought there were alternative paths that did not involve EVs. With several states moving towards banning the sale of new internal combustion engine vehicles, including hybrids, it is clear that both Toyota and the United States and Canada are committed to EVs.

The next question is what Toyota's EV offerings in the North American market will look like. Will they continue to offer weak options like the bZ4X, or will they introduce high-quality EVs that can drive significant sales? Further announcements from Toyota will shed light on their actual EV strategy.

Featured image provided by LG and Toyota.