As the world continues to charge towards an electric future, leading automaker Toyota is making significant strides. Partnering with battery giant LG Energy Solution (LGES), Toyota prepares to supercharge its US-based electric vehicle (EV) production.
A Power-packed Partnership
The recent announcement from Toyota and LGES heralds a major shift in the automotive landscape. They’ve inked an agreement for LGES to provide lithium-ion batteries to Toyota’s U.S.-built electric vehicles, starting in 2025.
This move is not just a mere collaboration; it’s a statement reflecting the monumental wave of investments in North America’s EV battery plants, a response to the U.S. Inflation Reduction Act (IRA). The IRA, along with other U.S. legislation, is giving a substantial push for domestic EV production, inclusive of batteries and their raw materials.
LGES is reportedly diving headfirst with a whopping $3 billion investment in its Holland, Michigan battery facility. This investment is specifically for dedicated production lines to supply Toyota’s Kentucky-based plant.
A noteworthy mention is LGES’s existing partnership with General Motors in their Ultium battery initiative. They are in the process of constructing a separate $2.1 billion plant in Lansing, Michigan, targeting GM’s electric vehicles. This tie-up with Toyota further extends LGES’s supply chain, marking their collaboration with five leading automakers, such as Hyundai, Honda, and Stellantis, in North America.
The Bigger Picture
To put things into perspective, there are currently around 37 battery plants either in operation or in the planning phase across the U.S. and Canada. These plants aim for an annual production capacity of 1.3 terawatt-hours—enough energy to power over 10 million EVs yearly.
In a previous announcement in August 2022, Toyota unveiled its ambition to invest $3.8 billion in a new battery plant located in North Carolina, in collaboration with their longtime ally Panasonic. This new venture is scheduled to kick off in 2025.
As for the specifics, “LGES will supply Toyota with 20 gigawatt-hours of high-nickel NCMA pouch-type battery cells and modules annually from the Michigan facility,” ensuring a supply for over 250,000 EVs per annum. These modules will eventually be assembled into battery packs and integrated into Toyota’s upcoming EVs in Georgetown, Kentucky.
Closing with Toyota’s grand vision: the automaker aims to produce a staggering 3.5 million electric vehicles annually by 2030, showcasing 30 distinct EV models under the Toyota and Lexus banners on a global scale.