LG Chem secures $2.15B battery deal with Toyota for U.S. plant

Industry

Published: 10 Oct. 2023, 18:51

LG Chem secures $2.15B battery deal with Toyota for U.S. plant

LG Corp. Chairman Koo Kwang-mo inspects a cathode material production line at LG Chem's Cheongju plant in North Chungcheong on April 17. [LG CORP.]

LG Chem clinched a 2.86-trillion-won ($2.15-billion) deal with Toyota Motor to supply battery materials to the carmaker’s U.S. manufacturing plant, the company said in a regulatory filing Tuesday.

With the signing of the long-term contract, LG Chem will supply cathode materials to Toyota Motor Engineering & Manufacturing North America from October this year through 2030.

LG Chem, Huayou to build LFP cathode plant in Morocco

This is the first time LG Chem will supply cathode materials to Toyota.

As the world’s largest automaker in terms of sales, Toyota generated 20 percent of its sales from the North American region last year. Toyota has said it plans to build up to 3.5 million electric vehicles annually by 2030 and aims to offer 30 EV models globally, including in its Lexus brand.

Cathodes are one of the critical ingredients in making EV batteries, taking up 40 percent of the battery cost.

LG Chem plans to expand its cathode production capacity, around 120,000 tons as of 2023, to 470,000 tons by 2028. The company recently announced that it will build a 50,000-ton lithium-phosphate-iron cathode materials plant in Morocco with China’s Huayou Group.

LG Chem signed a cathode supply deal with General Motors in July of last year to provide the U.S. carmaker with 950,000 tons of cathodes from the second half of 2022 through 2030.

The latest supply deal follows LG Energy Solution’s massive battery deal with Toyota, signed on Oct. 5.

Under the contract, LG Energy Solution will supply 20 gigawatt-hours of NCMA — nickel, cobalt, manganese and aluminum-based — battery modules per year, enough to manufacture around 200,000 high-performance electric vehicles. The supply will start in 2025 and last for 10 years.

BY SHIN HA-NEE [shin.hanee@joongang.co.kr]