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HOLLAND, MI – LG Energy Solution plans to bring a $3 billion investment to Michigan under a supply agreement with Toyota Motor North America.
LG Energy will manufacture lithium-ion batteries for Toyota electric vehicles at its Michigan facility, both companies announced Wednesday, Oct. 4. Under the contract, LG Energy’s investment will develop new production lines for battery cells and modules to be used exclusively for Toyota.
The South Korea-based company is currently constructing a $1.7 billion battery plant in Holland.
Related: See inside $1.7B ‘smart’ battery plant under construction in Holland
“With our 30 years of experience in lithium-ion batteries, we will provide innovative power solutions to support Toyota’s push further into battery electric vehicles,” said Youngsoo Kwon, CEO of LG Energy Solution, in a statement. “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.”
Starting in 2025, LG Energy will manufacture the battery modules with nickel, cobalt, manganese and aluminum cells at an annual capacity of 20 gigawatt hours, a news release said. The batteries will then go to Toyota Motor Manufacturing Kentucky to be assembled into battery packs for electric vehicles.
The agreement is LG Energy’s largest supply contract outside of joint ventures.
The company now supplies batteries to top five global automakers including Ford, General Motors and Stellantis, a news release said. LG Energy has eight battery manufacturing facilities currently operating or under construction in North America.
Toyota plans to assemble a new battery electric vehicle model at its Kentucky plant in 2025. The supply agreement will help the automaker reach its goal of producing 3.5 million electric vehicles a year by 2030.
“At Toyota, our goal is to reduce carbon emissions as much as possible, as fast as possible,” said Tetsuo ‘Ted’ Ogawa, president and CEO of Toyota Motor North America. “Having secure supplies of lithium-ion batteries at scale with a long-term relationship to support Toyota’s multi-pathway approach and growth plans for BEVs in North America is critical to achieve our manufacturing and carbon reduction plans. Working with LG Energy Solution, we are excited to be able to offer products that will provide the performance and quality our customers expect.”
Related: See where billon-dollar electric vehicle projects are landing in Michigan
The LG Energy investment joins a portfolio of recent multi-billion dollar projects that have landed in Michigan.
General Motors announced last January it planned to pour $7 billion into four Michigan facilities creating 4,000 jobs. Gotion Inc. is planning to invest $2.36 billion in a 2,350-job battery parts plant near Big Rapids. And Detroit-based startup Our Next Energy is developing a $1.6 billion battery gigafactory in Wayne County.
“Today’s announcement that LG Energy Solution and Toyota are partnering up to power electric vehicles in America right here in Michigan reaffirms our strategy to Make It in Michigan by building a landscape that encourages global investment while creating opportunities for people and communities across our state,” Gov. Gretchen Whitmer said in a statement.
The LG Energy news comes about a week after Ford Motor Co. paused construction on its $3.5 billion battery plant in southwest Michigan. The Dearborn automaker cited the ongoing United Auto Workers strike as one of the key reasons behind halting work. CEO Jim Farley said the project has not been canceled while Ford figures “the right path forward” for Marshall.
More on MLive:
Millions worth of incentives approved for $1.7 billion Holland battery plant expansion
Michigan gave millions to Ford’s paused mega site project. What’s been spent?
Battery manufacturer plans $1.5 billion investment in Holland, up to 1,000 jobs
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