Toyota Inks Battery Supply Deal With LG Energy For US EV Production - Toyota Motor (NYSE:TM)

Toyota Motor Corp. TM has secured a battery supply for its forthcoming fleet of electric vehicles (EVs) in the US. The auto giant has entered into a long-term agreement with LG Energy Solution to power its upcoming US-assembled EV models.

According to a report by Electrek on Tuesday, this agreement will take effect in 2025, and LG Energy Solution will provide Toyota with 20 GWh of battery modules annually. These modules will be high-nickel NCMA (nickel, cobalt, manganese, aluminum) pouch-type cells.

As part of the deal, LG Energy Solution will invest approximately $3 billion into its facility in Holland, Michigan, to establish dedicated EV battery production lines for Toyota. Once completed, these battery modules will be shipped to Toyota Motor Manufacturing Kentucky, Toyota’s largest global manufacturing plant, where they will be assembled into battery packs for the new EVs.

In May, Toyota announced plans to produce its first U.S.-assembled EV – a three-row electric SUV – at the Kentucky plant. This SUV is expected to be one of ten new Toyota EVs launching globally by 2026. The new model is anticipated to be released in 2025, in alignment with the new supply agreement.

The supply agreement with LG Energy is a significant move for Toyota, as the automaker has been slow to transition to the EV era. However, with this agreement, Toyota is taking steps towards its goal of launching advanced EV batteries starting in 2026 to power EVs with nearly 500 miles of range, faster charging, and a lower cost.

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