LG Energy Solution Ltd. (LGES) announced Thursday that it has entered into a ten-year agreement with Toyota Motor Corp. to provide electric vehicle (EV) batteries made in the United States. The two companies’ U.S. subsidiaries — LG Energy Solution Michigan, Inc. and Toyota Motor Engineering & Manufacturing North America, Inc. — signed the deal.
This marks the first time the South Korean battery firm has made a battery supply agreement with the Japanese carmaker. LGES will invest 4 trillion won (approximately US$3 billion) to construct a 20 GWh battery plant in Michigan by 2025, with the intention of supplying Toyota with nickel-rich NCMA lithium ion batteries for the next decade, up to 2035. The NCMA (nickel, cobalt, manganese, aluminum) uses a 90 percent nickel cathode, reducing the use of cobalt and incorporating aluminum for greater safety.
The battery cells produced in the Michigan plant will be delivered to Toyota’s Kentucky plant and be assembled there into battery packs for the carmaker’s EV models. This supply deal makes LGES a battery provider to the world’s top five carmakers — General Motors Co., Toyota Motor, Hyundai Motor Group, Volkswagen Group, and Renault-Nissan alliance.