Toyota US battery deal speaks to greater BEV commitment
Partnership with LG will prepare Toyota for US BEV production by 2025
The US arm of Japanese automaker Toyota has signed an agreement with South Korean battery firm LG Energy Solution (LGES) to supply lithium-ion battery modules that will be assembled in the US. LGES will invest approximately $3bn into the Michigan facility to produce batteries exclusively for Toyota’s upcoming BEV range.
Under the contract, LGES will supply battery modules at an annual capacity of 20GWh starting from 2025. The battery modules will consist of high-nickel NCMA (nickel, cobalt, manganese, aluminium) pouch-type cells. LGEs is currently the ex-China global market leader in battery making, although under pressure from China’s Catl.
Toyota has long been a proponent of HEVs and PHEVs and has been slow to lean into all-electric battery powertrains. In a May report, US non-profit the International Council on Clean Transportation classed the OEM as a “laggard” with respect to its transition to zero-emission vehicles.
At present Toyota on its own only produces one BEV, the bZ4X crossover, as well as the bZ3 sedan it develops jointly with China’s BYD for the Chinese domestic market.
But Toyota says it is expanding its line of BEVs, including a model set to be built at the company’s manufacturing facility in Kentucky beginning in 2025, which will be powered by the batteries produced at the Michigan plant. By 2030, the company says it will offer at least 30 BEV models and expects to sell c.3.5mn BEVs a year globally.
The announcement makes no mention of Toyota’s ongoing efforts to produce solid-state batteries, which, the company says, can deliver 700-mile range and full charging in under fifteen minutes.
Toyota has been developing solid-state batteries with Japanese electronics company Panasonic since April 2020 and says that the joint venture is “on track for limited production by 2025”. “Solid-state battery technology is a potential cure-all for the drawbacks facing electric vehicles that run on conventional lithium-ion batteries, including the relatively short distance travelled on a single charge as well as charging times,” Toyota says, and they “are set to become a real alternative to lithium-ion batteries.”
But the new announcement with LG is not a signal that the solid-state project with Panasonic is any jeopardy, experts say. “Most OEMs have more than one source for EV batteries, so it should not be a surprise that in addition to Panasonic, Toyota is also going to use LG,” says Paul Haelterman, vice-president of automotive consultancy Strategic Vision.
The bold promises around solid-state batteries’ ability to be a gamechanger for EV range and charging efficiency has prompted scepticism, since Toyota hailed the 'technological breakthrough' in July. EV industry consultant and 20-year Toyota alumnus James Carter says that the solid-state announcements, “when combined with [Toyota’s] outstanding quality, durability, and reliability reputation, hybrid leadership and reticence to prematurely boast”, should be deserving of trust. “I will believe it when it is in a production car with customers putting miles on it,” Carter nonetheless cautions.
“Toyota have learned that, as long as you huff and puff about future developments, you can keep making fossil fuelled engine vehicles for longer and get away with it,” warns Spitfire Research decarbonisation and energy consultant Paul Martin.
However, the new joint venture with LG, which signals a commitment to battery production based on proven technology in the US, will add greater credence to Toyota claims on its commitment to BEV production going forward.