LG Energy Solution has teamed up with Toyota, the global No. 1 automaker, to make a raid into the rapidly surging North American EV market.
LG Energy Solution said on Oct. 5 the company struck a long-term battery supply deal for 20GWh of annual production capacity.
The latest deal is the biggest-ever individual order LG Energy Solution has won, except for joint-venture agreements. LG Energy Solution will supply high-nickel NCMA pouch cell modules.
To this end, LG Energy Solution plans to build battery cell and module production lines for Toyota by investing a combined 4 trillion won in the Michigan plant from late 2023 until 2025.
The produced battery cell and module production will be assembled into battery packs and installed in Toyota’s new EV models in its plant in Kentucky.
Both companies expect the production of batteries improved in all areas by combining LG Energy Solution’s battery cell and module technology power and Toyota’s pack technology power, thus selling EVs customers can rely on in a safe fashion.
An image of the pouch long-cell battery, to be supplied to Toyota by LG Energy Solution.
LG Energy Solution boasts the world’s top technology power in the battery cell and module segment and mass production capacity, with about 29,000 patents and 200GWh of annual global production capacity.
The company has made significant headway, such as improving high-nickel NCMA heat control technology for the collaboration.
Toyota has showcased high-level battery pack technologies based on its own platform and production expertise, which has proven to be capable of producing more than 10 million units annually.
Both companies expect that innovative batteries made with combination of their technologies will provide new momentum in the paradigm shift of the North American EV market.
Toyota Motor North America CEO Tetsuo Ted Ogawa said, “Toyota aims to reduce CO2 as fast as possible and expand sales of EVs in North America.”
“Securing a stable supply of lithium-ion batteries from a long-term perspective is an integral part of production and product planning, and I’m pleased we will be able to offer high-safety, function and quality products corresponding to customers’ expectations through collaboration with LG Energy Solution,” he said.
LG Energy Solution CEO and Vice Chairman Kwon Young-soo said, “A new cooperation between Toyota, the global No. 1 automaker, and LG Energy Solution, a battery leader, is expected to bring about an outstanding advancement in the North American EV market, and we will ramp up the North American production network and offer the world’s top customer values by strengthening the competitive of innovative products through the collaboration.”
It is the first time that LG Energy Solution has agreed to cooperate on battery supply with Toyota.
Toyota is a global automaker powerhouse which raked up 371 trillion won in annual sales last year, ranking first in terms of global car sales.
The automaker’s performance in North America is outstanding, ranking second in terms of EV units sold there.
Toyota is hitting the gas to purse electrification by announcing a plan to release 30 models and sell 3.5 million EVs annually in the global market by 2030.
Meanwhile, with the latest deal, LG Energy Solution will supply batteries to the global top 5 automakers — Toyota, Volkswagen, Renault-Nissan, Hyundai Motor and GM.
In particular, the latest supply agreement has served as an opportunity for LG Energy Solution to secure a superb competitive edge in the North American EV market.
LG Energy Solution operates and builds two sole and six joint-venture plants in North America while continuously expanding customer portfolio and global production capacity.
The company logged 440 trillion won in cumulative backlog orders as of June.
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