Toyota Motor (NYSE:TM) and LG Energy Solution have signed a long-term battery supply agreement for lithium-ion battery modules for the carmaker’s battery electric vehicles (EVs) assembled in the United States.
LG will supply Toyota with battery modules at an annual capacity of 20GWh starting in 2025, the two companies said on Wednesday.
The battery modules, made up of nickel, cobalt, manganese, and aluminum (NCMA) pouch-type cells, will be manufactured at LG's facility in Michigan.
LG will invest about US$3 billion in its Michigan facility to support new production lines for battery cells and modules exclusively for Toyota, which are expected to be completed for 2025.
The two companies said the partnership would support Toyota’s battery EVs, including a new model that will be assembled at its Kentucky facility in 2025.
Shares of South Korea-listed LG fell 4.3% on Wednesday to 456,000 won while Toyota shares fell 2.8% to US$168.88.
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