Under a new agreement, LG Energy Solution will supply automotive lithium-ion battery modules for Toyota Motor North America's battery electric vehicles (BEVs) at an annual capacity of 20 GWh from 2025.
LG Energy Solution's facility in Michigan will manufacture the battery modules, including high-nickel NCMA (nickel, cobalt, manganese, aluminum) pouch-type cells.
The company plans to invest about $3 billion in the facility to establish new production lines for battery cells and modules for Toyota to be completed by 2025. Initially, the battery modules will reach Toyota Motor Manufacturing Kentucky, where they will be assembled into battery packs and equipped onto BEVs.
While Toyota aims to offer 30 BEV models globally across its Toyota and Lexus brands and produce up to 3.5 million BEVs annually by 2030, a new BEV model will be assembled in Kentucky in 2025.
"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 achieving our manufacturing and carbon reduction plans,” said Tetsuo Ted Ogawa, President and CEO of Toyota Motor North America.
The agreement combines LG Energy Solution's proven capabilities in manufacturing battery cells and modules and Toyota's advanced technologies in battery packs to create a product using the former’s innovative power solution to optimize battery system performance. LG Energy Solution improves battery safety with thermal management for its high-nickel NCMA batteries.
"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,” said Youngsoo Kwon, CEO of LG Energy Solution.
Currently, LG Energy Solution has eight battery manufacturing facilities operating or under construction in North America, and it will continue to expand both its production network and supply chain in the region.