LG Energy Solution to supply Toyota with batteries, invest $3 billion in Michigan plant

LG Energy Solution's pouch-type battery [LG ENERGY SOLUTION]

LG Energy Solution inked a battery deal with Toyota Motor, which will make the Korean company invest 4 trillion won ($3 billion) to build a dedicated production line in its Michigan plant.
 
The battery maker said Thursday the deal with the world's largest automaker is to supply 20 gigawatt-hours of NCMA — nickel, cobalt, manganese and aluminum-based — battery modules per year, which is enough to manufacture around 200,000 high-performance electric vehicles.
 

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LG Energy Solution's NCMA batteries contain 90 percent nickel. Aluminum content in the batteries increases their capacity, durability and resistance. They also support quick charging.
 
The size of the deal has not been disclosed.
 
LG Energy Solution will invest an additional $3 billion in its Holland, Michigan battery factory to build a dedicated production line for the deal by the end of 2025.
 
The battery maker's modules will be transferred to Toyota's Kentucky plant to be assembled into battery packs for the automaker's new electric vehicles in the North American region.
 
The deal is LG Energy Solution's largest single supply agreement secured outside joint venture agreements.
 
"We're excited to have Toyota, the best-selling global automaker, as our new customer," Kwon Young-soo, LG Energy Solution CEO, said. "The agreement also presents another big opportunity for us to strengthen our production capacity in North America, thereby bringing more real-life, large-scale progress toward electrification in the region."
 
With the latest Toyota deal, LG Energy Solution now has all the top five global automakers as clients, including Volkswagen, Hyundai Motor, Renault Nissan Alliance and General Motors.
 
LG Energy Solution has eight battery manufacturing facilities operating or under construction in North America. The company's annual production capacity will be around 300 gigawatt-hours by 2026.
 
LG Energy Solution's order backlog stood at 440 trillion won at the end of June.
 
LG Energy Solution is the world's No. 2 battery maker as of the first half after CATL, with 16.5 percent of the market share.  
 

BY SARAH CHEA [chea.sarah@joongang.co.kr]