USA: Toyota signs battery supply agreement with LGES

Toyota Motor North America has placed a major order with LG Energy Solution for batteries for electric cars. The manufacturer will likely use the batteries for its first US-made EV, a seven-seat electric SUV.

LGES will supply Toyota with battery modules at an annual capacity of 20 gigawatt hours (GWh) from 2025. The modules will consist of NCMA pouch cells with a high nickel content, which Toyota will install in its new electric cars manufactured in the US.

The batteries will be produced at the LG Energy Solution factory in Michigan. To fulfil the supply agreement, LG Energy Solution will invest about three billion dollars in the factory to set up new production lines for battery cells and modules exclusively for Toyota. The latter should be up and running by 2025.

The battery modules will initially be delivered to Toyota Motor Manufacturing Kentucky, where they will be assembled into battery packs and installed in BEVs. As reported, the Japanese want to build electric cars in the USA from 2025. The first model will be a large electric SUV with three rows of seats. The energy content of the EV’s battery pack is not yet known.

Toyota does not elaborate on the vehicle in the current announcement. Regarding the batteries ordered, it says that LG Energy Solution “continues to enhance battery safety, including with respect to its thermal management for its high-nickel NCMA batteries.” There are no details on the origin of the raw materials.

For LGES, the Toyota deal is the largest single order made outside of joint venture agreements (such as Ultium Cells with Ford or NextStar Energy with Stellantis). “We’re excited to have Toyota, the best-selling global automaker, as our new customer,” says Youngsoo Kwon, CEO of LG Energy Solution. The agreement also presents another big opportunity for us to strengthen our production capacity in North America, thereby bringing more real-life, large-scale progress toward electrification in the region.”

“At Toyota, our goal is to reduce carbon emissions as much as possible, as fast as possible,” says Tetsuo Ogawa, president and CEO of Toyota Motor North America. “Having secure supplies of lithium-ion batteries at scale with a long-term relationship to support Toyota’s multi-pathway approach and growth plans for BEVs in North America is critical to achieve our manufacturing and carbon reduction plans.”

toyota.com