Toyota Joins Forces with LG Energy Solution in Long-term Battery Supply Agreement for U.S. EVs

SEOUL, Korea and PLANO, Texas - October 4, 2023 - LG Energy Solution and Toyota Motor North America, Inc. have formalized a transformative supply agreement that promises to reshape the electric vehicle  landscape in the United States. Under this strategic alliance, LG Energy Solution will provide cutting-edge lithium-ion battery modules to power Toyota's forthcoming American-manufactured EVs.

Under the terms of the contract, LG Energy Solution will deliver lithium-ion battery modules annually, boasting a remarkable production capacity of 20 gigawatt-hours (GWh) starting in 2025. These modules, featuring high-nickel NCMA (nickel, cobalt, manganese, aluminum) pouch-type cells, will be meticulously crafted at LG Energy Solution's state-of-the-art facility in Michigan.

This collaboration represents a pivotal step in Toyota's ambitious electrification roadmap, including the scheduled assembly of a new BEV model at Toyota Motor Manufacturing Kentucky in 2025. Toyota's visionary strategy encompasses the introduction of 30 BEV models globally across its Toyota and Lexus brand names and aims to achieve an annual production volume of up to 3.5 million BEVs by 2030.

Tetsuo “Ted” Ogawa, President and CEO of Toyota Motor North America, emphasized the strategic significance of this partnership, stating, "At Toyota, our goal is to reduce carbon emissions as much as possible, as fast as possible. 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. Working with LG Energy Solution, we are excited to be able to offer products that will provide the performance and quality our customers expect."

To fulfill the extensive supply agreement, LG Energy Solution will make a substantial investment of KRW 4 trillion (approximately USD 3 billion) in its Michigan facility, with completion anticipated in 2025. The expansion aims to establish new production lines exclusively dedicated to manufacturing battery cells and modules for Toyota.

LG Energy Solution remains committed to advancing battery safety, particularly in thermal management for its high-nickel NCMA batteries. This commitment underscores the company's dedication to providing reliable and safe battery solutions for the EV industry.

Youngsoo Kwon, CEO of LG Energy Solution, expressed his enthusiasm about the partnership, stating, "We’re excited to have Toyota, the best-selling global automaker, as our new customer. 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."

This collaboration marks a significant milestone for LG Energy Solution, representing the company's largest single supply agreement secured outside of joint venture agreements. With a remarkable market presence, the company already supplies batteries to all top five global automakers, underscoring its leadership in the electric vehicle battery market. LG Energy Solution is expanding its production network and supply chain in North America with eight battery manufacturing facilities currently operational or under construction in the region.

In a rapidly evolving automotive industry embracing sustainable mobility solutions, the partnership between LG Energy Solution and Toyota is poised to play a pivotal role in driving the adoption and success of electric vehicles in the United States and beyond.