Toyota orders cathode materials from LG Chem in the USA

Toyota Motor North America is securing large-scale battery materials from LG Chem, specifically cathode materials for Toyota's battery plant in North Carolina. Deliveries are expected to begin in 2025.

Image: Toyota

Both companies are said to have signed a long-term contract worth the equivalent of 2.02 billion euros (original quote: 2.13 billion US dollars) for the supply of cathode materials. This is according to several Korean media reports, which refer to official information from LG Chem. The company will supply the cathode materials from its new cathode plant in Tennessee to Toyota’s battery plant in North Carolina, which is also scheduled to start production in 2025.

The supply contract between LG Chem and Toyota Motor North America is to run until 2030. Further, the supply deal is independent of the contract between Toyota Motor North America and LG Energy Solution, which was concluded only a few days earlier and concerns complete battery modules.

LGES is also to supply Toyota with battery modules with a total capacity of 20 gigawatt-hours annually from 2025 onwards, which contain NCMA pouch cells with a high nickel content and are to be installed by Toyota in new US electric cars. This was announced by Toyota Motor North America at the end of last week. The batteries will be produced at the LG Energy Solution factory in Michigan, which is being expanded with new production lines for battery cells and modules exclusively for Toyota at a cost of around three billion US dollars (about 2.85 billion euros). Completion is planned for 2025.

The battery modules will initially be delivered to Toyota Motor Manufacturing Kentucky, where they will be assembled into battery packs and installed in BEVs. As reported, the Japanese company is also planning to build electric cars in the USA from the middle of the decade, with the first model to be a large electric SUV with three rows of seats. The energy content of this vehicle’s battery pack is not yet known.

For LGES, by the way, the Toyota deal is the largest single order made outside of joint venture agreements (such as Ultium Cells with Ford or NextStar Energy with Stellantis).

The question of why Toyota does not use a Japanese cell or module supplier is easy to answer: in order to benefit from tax relief under the Inflation Reduction Act, electric vehicle manufacturers must use battery materials that are manufactured or processed in North America. This is the case with LG Chem or LG Energy Solution.


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