Toyota has found a battery supplier to power its next wave of electric vehicles in the US. LG Energy Solution and Toyota signed a long-term battery supply agreement Wednesday for upcoming EV models assembled in the US.
Starting in 2025, LG Energy Solution will supply Toyota with 20 GWh of battery modules annually.
According to the new supply agreement, the battery modules will be high-nickel NCMA (nickel, cobalt, manganese, aluminum) pouch-type cells.
LG Energy Solution will invest around $3 billion (KRW 4 trillion) into its Holland, Michigan, facility to build exclusive EV battery production lines for Toyota to increase supply.
Once complete, the battery modules will be sent to Toyota Motor Manufacturing Kentucky, the automaker’s largest manufacturing plant globally. The battery modules will then be assembled into battery packs and used to power new EVs in the US.
Toyota revealed in May it would produce its first EV assembled in the US, a three-row electric SUV at the facility. It will be one of ten new Toyota EVs launching globally by 2026.
Although Toyota has yet to reveal any other details on the new EV, it’s expected to arrive in 2025, coinciding with the new supply agreement.
Ted Ogawa, president and CEO of Toyota Motor North America, said the new supply agreement with LG is “critical” for its EV growth plans in the US.
Meanwhile, the supply deal is the single largest from LG Energy outside of joint ventures. LG now supplies batteries to the top five global automakers. The company has eight manufacturing plants operating or under construction in North America as it continues expanding its battery supply chain.
Toyota, a notorious laggard in the EV era, has recently stepped up its vision for the future. The automaker revealed plans to launch advanced EV batteries starting in 2026 to power EVs with nearly 500 miles (800 km) of range, faster charging, and a lower cost.
Last month, the automaker showed off its next-gen EV production line, intended to significantly cut costs and speed up production.
Toyota will implement new technology like Giga casting, self-propelled assembly lines, and more in a bid to catch up to Tesla and other EV leaders.
With fully electric vehicles accounting for less than 0.40% of Toyota’s over 1.6 million car sales in North America through September, the automaker has a long way to go in catching up.
Toyota sold 6,486 bZ4X models through the first nine months of 2023. Even Rivian, an EV startup, is easily outpacing Toyota, with 15,304 EVs delivered in the third quarter alone. Rivian has delivered 36,150 vehicles in 2023 and is on pace to produce 52,000 units.
While many automakers are hitting double-digit EV sales or even 100%, Toyota’s account for far less than 1%. Securing supply agreements for new electric models is one of the first steps to get back on track, but 2025 may still be too little too late.