Toyota Motor and LG Energy Solution have agreed to supply lithium-ion batteries for use in the Japanese automaker's electric vehicles made in the US beginning in 2025. The US Inflation Reduction Act has sparked an investment tidal wave in new EV battery factories in North America, which was capped by the Toyota-LGES announcement. Incentives are offered by the IRA and other US laws to increase American manufacture of EVs, batteries, and raw materials. LGES will invest $3 billion in its battery manufacturing facility in Holland, Michigan to supply Toyota's Kentucky factory from specialised production lines. LGES is also a participant in the Ultium battery joint venture with General Motors, which is constructing a different $2.1 billion factory in Lansing, Michigan, to supply GM's electric vehicles.
LGES will now be able to provide batteries from its eight jointly run and fully owned North American facilities to five leading manufacturers, including Stellantis, Hyundai, and Honda, thanks to the arrangement with Toyota. According to Benchmark Mineral Intelligence, there are at least 37 battery factories now in operation or scheduled for construction in the US and Canada, totaling 1.3 terawatt-hours of annual output capacity. That would be sufficient to fuel more than 10 million electric vehicles annually. In comparison to the North American expectations, Benchmark estimates that there are 291 battery plants either operating or planned in China, with a total annual manufacturing capacity of 6.1 TWh.
Toyota said in August 2022 that it planned to triple its investment to $3.8 billion in a new North Carolina battery plant it will operate with longtime partner Panasonic through the companies' Prime Planet Energy & Solutions (PPES) joint venture. The plant is slated to open in 2025. LGES will supply Toyota with 20 gigawatt-hours of high nickel NCMA pouch-type battery cells and modules annually from the Michigan facility. That's enough to supply more than 250,000 EVs a year. The modules will be assembled into battery packs and installed in new EVs by Toyota in Georgetown, Kentucky. Toyota has said it plans to build up to 3.5 million electric vehicles a year by 2030 and aims to offer 30 EV models globally from its Lexus and Toyota brands.
