LG Energy Solution and Toyota Motor North America, Inc. (Toyota) have signed a supply agreement for lithium-ion battery modules. Particularly, the supply deal will cover Toyota battery electric vehicles (BEVs) that will be assembled in the United States.

Under the contract, LG Energy Solution will supply automotive battery modules at an annual capacity of 20GWh starting from 2025. Hence, the battery modules, consisting of high-nickel (nickel, cobalt, manganese, aluminum or NCMA) pouch-type cells, will be manufactured in LG Energy Solution’s Michigan facility.

The innovative power solutions will support Toyota’s expanding line of BEVs. Moreover, it will also cover part of its multi-pathway product strategy that Toyota Motor Manufacturing Kentucky will produce in 2025. They will also help further Toyota’s vehicle electrification initiatives, as it aspires to offer 30 BEV models globally across its Toyota and Lexus brand nameplates and produce up to 3.5 million BEVs annually by 2030.

New Facility Investments

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

Working with LG Energy Solution, we are excited to be able to offer products that will provide the performance and quality our customers expect.”

LG Energy Solution will invest KRW 4 trillion (approximately USD 3 billion) in its Michigan facility to fulfill the supply agreement. Thus, this will establish new production lines for battery cells and modules exclusively for Toyota, with completion slated for 2025. Initially, the battery modules will go to Toyota Motor Manufacturing Kentucky to be assembled into battery packs and equipped onto BEVs.

Largest Single Supply Deal

The agreement brings together LG Energy Solution’s proven capabilities in manufacturing top-quality battery cells and modules at scale. Moreover, Toyota’s advanced technologies in battery packs create a product using LG Energy Solution’s innovative power solution. This optimizes battery system performance, providing peace of mind and further enhancing the BEV customer experience. LG Energy Solution continues to enhance battery safety, including with respect to its thermal management for its high-nickel NCMA batteries.

“With our 30 years of experience in lithium-ion batteries, we will provide innovative power solutions to support Toyota’s push further into battery electric vehicles,” said Youngsoo Kwon, CEO of LG Energy Solution. Furthermore, Kwon said, “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.”

The landmark deal represents LG Energy Solution’s largest single supply agreement secured outside of joint venture agreements. The company now supplies its batteries to all top five global automakers. Based on its market leadership, the company has eight battery manufacturing facilities currently operating or under construction in North America. Moreover, it continues to expand both its production network and supply chain in the region.