In line with its plans to build up to 3.5 million electric cars per year by 2030, Toyota has signed a new battery supply deal with LG in the United States.
According to the agreement, LG will invest $3 billion in its Michigan plant to be able to supply Toyota with batteries for the carmaker’s electric cars.
LG Energy Solution will supply the car giant with an annual capacity of 20 gigawatt Hours (GWh) starting from 2025. The move was spurred by the US Inflation Reduction Act, which proposes incentives to boost domestic production of EVs, batteries, and raw materials in the US.
It is gathered that the batteries provided by LG will be nickel, cobalt, manganese, and alluvium puck-type cells and will be rolled off to the assembly line of the LG plant in Holland, Michigan.
The battery packs will equip the electric Toyotas that are to be assembled in the United States. One of them will be an electric car set to be manufactured at the Toyota site in Kentucky. The model will enter production in 2025. The Japanese targets a lineup that will include 30 Toyota- and Lexus-branded electric vehicles by 2030.
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LG will produce the battery cells and modules in the Michigan plant and transport them to the Toyota plant in Kentucky where Toyota will assemble them into battery packs and fit them into future electric cars.
The deal between Toyota and LG is the largest single supply agreement LG Energy Solution has ever signed.