Dive brief:
- Battery maker LG Energy Solution will invest $3 billion in its battery manufacturing plant in Holland, Michigan as part of a new lithium battery supply agreement with Toyota.
- The batteries produced at the LG Energy Solution site will be shipped to Toyota’s largest vehicle manufacturing plant, based in Georgetown, Kentucky, and used in the automaker’s new North American-assembled battery electric vehicle. automobiles
- The deal is the battery maker’s largest supply agreement outside of a joint venture and will begin in 2025. LG Energy Solution plans an annual battery production capacity of 20 gigawatts.
Diving knowledge:
The battery supply deal is part of Toyota’s push to produce 3.5 million battery electric vehicles a year by 2030.
To support the push, the automaker announced plans last month triple its annual goal of electric vehicle production to 600,000 vehicles by 2025 as it looks to compete with global EV makers such as Tesla and China-based BYD.
At the same time, Toyota announced plans update and streamline its electric vehicle manufacturing process and lower production costs, which has inhibited electric vehicle growth plans for many automakers.
North American segment of the company sold 64,298 electric vehicles in September81.5% more year-on-year.
LG Energy Solution, meanwhile, has become a US battery manufacturing giant over the past year.
The company has signed lucrative partnerships with some of the world’s biggest automakers, investing billions of dollars in battery factories in the United States.
The battery manufacturer is partnership with Hyundai to build a $6.3 billion battery manufacturing campus in Savannah, Georgia. With Honda, an end is being built $4.4 billion battery factory in Fayette County, Ohio.
Finally, LG Energy Solution and GM’s joint venture Ultium is building three battery production sites in Ohio, Tennessee and Michigan.
LG Energy Solution alone is investing $5.5 billion in a Queen Creek Complex, Arizonawhere it will produce both cylindrical EV batteries and lithium iron phosphate batteries.
“With our 30 years of experience in lithium-ion batteries, we will provide innovative energy solutions to support Toyota’s push into battery electric vehicles,” said Young Soo Kwon, CEO of LG Energy Solution , in a statement. “The agreement also presents another great opportunity to strengthen our production capacity in North America, thus bringing more real and large-scale progress towards electrification in the region.”
