Toyota’s US-built battery electric vehicles (BEVs) – the first of which is slated to arrive in two years – will be powered by LG Energy Solution lithium-ion modules manufactured at the Korean company’s Michigan facility, according to a new agreement between the two parties.

The long-term deal will see LG supply Toyota Motor North America with 20 GWh of high-nickel NCMA (nickel, cobalt, manganese, aluminum) pouch-type cells per year starting in 2025, the same year when the Japanese automaker plans on launching its American-made EV as part of its ambitious plan to sell up to 3.7 million battery-powered cars (Lexus-branded models included) worldwide by 2030.

The LG-made cells will be shipped to Toyota’s manufacturing facility in Kentucky, the same complex that will handle the production of the firm’s next-gen US-made EV, where they will be assembled into battery packs and fitted to BEVs.

LG Energy Solution (LGES) NCMA Battery Cell

LG Energy Solution (LGES) NCMA Battery Cell

To make good on its part of the deal, LG will invest roughly $3 billion in its Michigan facility to establish new production lines for cells and modules exclusively for Toyota, making it the largest single supply agreement secured by the Korean company outside of joint venture agreements.

Last month, the Nippon automaker detailed its battery technology roadmap that included a so-called Performance Li-Ion Monopolar pack that’s slated to arrive in 2026 and offer over 497 miles of range, all while being capable of fast charging from 10 to 80 percent state of charge (SoC) in approximately 20 minutes. In other words, it’s expected that this new supply deal will result in the first batches of Toyota’s next-gen battery capable of over 400 miles of range, although the official press release doesn’t mention this detail specifically.

Earlier this year, the Japanese car manufacturer announced it will build an all-new, three-row, battery-electric SUV at its Kentucky plant, which is considered the company’s biggest manufacturing complex globally, from 2025. The complex currently makes the Camry, Camry Hybrid, RAV4 Hybrid, and Lexus ES.

Besides the agreement with LG Energy Solution, Toyota is also investing an additional $5.9 billion for the production of hybrid and battery-electric vehicles in the United States, including a new battery manufacturing facility in North Carolina that’s currently under construction and expected to go online in 2025.

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