Toyota Powers Up: $1.5 Billion Battery Partnership with LG Energy Solution in the U.S.

Toyota has announced plans to source vehicle batteries from LG Energy Solution (LGES) in the United States. This strategic procurement will involve batteries for both pure electric vehicles (EVs) and hybrid vehicles (HVs), estimated at an order size of around $1.5 billion. This move comes as a significant development, given LGES is taking over from General Motors, which decided to withdraw its investment from the Michigan facility by late 2024.

The batteries will be procured from LG Energy Solution's Lansing, Michigan facility, where an exclusive production line for Toyota is being constructed, with operations slated to begin in 2025. The procurement underlines Toyota's move to reinforce its EV market presence while maintaining its existing battery production initiatives in North Carolina. Notably, the partnership highlights both companies' commitment to bolstering supply chains within the rapidly evolving automotive sector.

LGES has expressed that supplying Toyota fits into their broader strategy of enhancing North American investments and fulfilling the demands from global automakers. Details surrounding this new venture are expected to be disclosed as they are finalized. The strategic alignment represents a crucial step for both Toyota and LGES in adapting to the shifting landscape of the North American EV market.

Furthermore, this arrangement reflects the broader industry trend where companies seek to localize their battery sourcing in North America. For instance, Japanese automaker Nissan has also opted to source EV batteries from South Korean company SK On for use from 2028 onwards in the United States, underscoring the competitive landscape and growing demand in the region.