South Korea’s LG Energy Solution signed an agreement to supply Toyota (NYSE:TM), the world’s largest automaker, with lithium-ion batteries for electric vehicles that will be assembled in the U.S., the companies said on Wednesday.
The deal will support Toyota’s expanding battery EV lineup, which includes a new model that will be assembled at a manufacturing plant in Kentucky — its largest globally — starting in 2025.
Under the contract, LG Energy Solution will supply automotive battery modules at an annual capacity of 20GWh starting from 2025. The battery modules, consisting of high-nickel NCMA (nickel, cobalt, manganese, aluminum) pouch-type cells, will be manufactured in LG Energy Solution's Michigan facility.
The innovative power solutions will support Toyota's expanding line of BEVs, part of its multi-pathway product strategy, including a new BEV model that will be assembled at Toyota Motor Manufacturing Kentucky in 2025. They will also help further Toyota's vehicle electrification initiatives, as it aspires to offer 30 BEV models globally across its Toyota and Lexus brand nameplates and produce up to 3.5 million BEVs annually by 2030.
“The one thing I wanted to change was the fact that we don’t have any business with the number one player Toyota,” LG Energy Solution CEO Youngsoo Kwon said in an interview which aired on Thursday.
Toyota has been the world’s top-selling automaker for three consecutive years, having sold nearly 10.5 million vehicles in 2022.
TM shares captured $3.92, or 2.3%, to open Thursday at $173.37.
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