Toyota has inked a landmark agreement with LG Energy Solution to provide lithium-ion battery modules for its future EVs produced in the United States. This strategic partnership has been spurred on by the Inflation Reduction Act, which aims to boost domestic manufacturing of EVs, batteries, and essential raw materials.
Starting in 2025, LG Energy Solution will furnish Toyota with an annual battery production capacity of 20 gigawatt-hours (GWh). These battery modules will be crafted using nickel, cobalt, manganese, and aluminum pouch-type cells, all manufactured at LG's facility located in Michigan.
To facilitate this initiative, LG Energy Solution has committed to investing a substantial $3 billion in its Michigan plant. This investment will pave the way for the creation of new production lines dedicated to manufacturing battery cells and modules. These components will then be transported to Toyota's manufacturing facility in Kentucky. Here, Toyota will assemble them into battery packs, which will eventually power upcoming electric vehicles. The automaker's ambitious plan envisions a lineup of 30 electric vehicles under the Toyota and Lexus brands by the year 2030.
This agreement represents the largest single supply deal ever secured by LG Energy Solution. Notably, the company already supplies batteries to five other manufacturers in North America, including Stellantis, Honda, and Hyundai.
Toyota's broader vision includes ramping up its EV production to a staggering 3.5 million units per year by the end of the decade, with the aforementioned 30 EV models forming a crucial part of their electrification strategy. Among these models, the bZ4X, a compact crossover co-developed with Subaru, marked Toyota's entry into the fully electric vehicle market when it hit the market in April 2022.
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