▲ Status of LG Energy Solution’s North American production plant (Image source: LG Energy Solution)

Annual 20GWh scale… Long-term supply of electric vehicle batteries starting from 2025
LG Ensol Cell/Module & Toyota Pack Technology Combined… Maximizing Safety and Performance

LG Energy Solution (hereinafter referred to as LG Energy Solution) is entering into a full-scale attack on the rapidly growing North American electric vehicle market by forming a battery supply partnership with Toyota.

LG Ensol announced on the 5th that it signed a large-scale long-term supply contract for electric vehicle batteries worth 20 GWh per year with Toyota Motor of Japan.

This contract is LG Energy Solution's largest single order contract excluding joint ventures (JVs).

Modules equipped with high-nickel NCMA-based pouch cells are expected to be supplied, and to this end, LG Energy Solution plans to invest a total of 4 trillion won in its Michigan plant in the U.S. from the end of 2023 to 2025 to build a production line for battery cells and modules exclusively for Toyota.

The high-nickel NCMA battery is a quaternary lithium-ion battery using nickel, cobalt, manganese, and aluminum. It is characterized by increasing the nickel ratio to approximately 90%, reducing the cobalt ratio to less than 10%, and adding aluminum to enhance stability.

The battery modules produced will be assembled into packs at Toyota's Kentucky plant in the United States and will be primarily installed in new Toyota electric vehicle models.

The two companies will jointly develop LG Ensol's cells and By combining Toyota's module technology and pack technology, we expect to be able to produce batteries that are even more enhanced in all aspects, including safety and performance, and further sell electric vehicles that customers can drive with confidence.

LG Ensol boasts the world's best technology and mass production capabilities in the battery cell and module sectors, with approximately 29,000 patents and an annual global production capacity of 200 GWh.

In fact, LG Ensol is achieving meaningful results through this collaboration, such as improving high-nickel NCMA-based thermal control technology.

Toyota is also demonstrating high-level battery pack technology based on its own developed platform and know-how in manufacturing more than 10 million automobiles per year.

The two companies expect that the innovative battery that combines the technologies of both companies will provide new momentum for Toyota electric vehicles in the transition of the North American electric vehicle market.

“Toyota is committed to reducing its CO₂ emissions as quickly as possible and expanding electric vehicle sales in North America,” said Tetsuo Ted Ogawa, President and Representative Director, Toyota Motor North America. “Securing a stable supply of lithium-ion batteries over the long term is a critical part of our manufacturing and product planning, and we are pleased to be working with LG Energy Solution to deliver products that meet our customers’ expectations of high safety, performance and quality.”

LG Energy Solution CEO and Vice Chairman Kwon Young-soo said, “The new collaboration between Toyota, the world’s No. 1 global automaker, and LG Energy Solution, a leading battery company, will be a catalyst for significant progress in the North American electric vehicle market.” He added, “Through this collaboration, we will further strengthen our North American production network and enhance our innovative product competitiveness.” We will strengthen our capabilities and provide the world’s best customer value,” he said.

Toyota is a traditional powerhouse in the automobile industry, achieving sales of 371 trillion won last year and ranking first in the world in terms of automobile sales. It also has great influence in North America, ranking second in automobile sales after GM.

Recently, the company has been pushing ahead with its electrification strategy, announcing plans to launch 30 types of vehicles by 2030 and sell 3.5 million electric vehicles annually in the global market.

Meanwhile, with this contract, LG Ensol will supply batteries to all five global automakers (Toyota, Volkswagen, Renault-Nissan, Hyundai, and GM).

In particular, this large-scale supply contract provides another opportunity to secure an overwhelming competitive edge in the North American electric vehicle market.

LG Ensol currently operates and builds two standalone plants and six joint venture plants in North America, and continues to expand its customer portfolio and global production capacity.

As of the end of June this year, LG Energy Solution's cumulative order backlog amounts to 440 trillion won.