LGES considers using Ultium Cells plant to produce Toyota’s batteries, as the electric vehicle (EV) market continues to evolve.
A few automakers and EV parts or component suppliers have struggled this year. Companies have had to restrategize to maintain their EV plans and stay profitable. South Korean battery supplier LGES has also had to shift its approach as the EV market stabilizes.
LGES’ battery supply deal with Toyota is one of the plans it has had to reevaluate and shift under current market conditions. In October 2023, LG Energy Solution agreed to supply Toyota with NCMA Long Cell pouch-type batteries for EVs made in the United States.
The South Korean supplier initially wanted to manufacture battery cells for Toyota at its Holland plant in Michigan. LGES planned to invest $3 billion into the Holland plant to establish a cell and module production line dedicated to Toyota. The plant was expected to start operations by 2025. However, the current state of the EV market has forced LGES to reconsider its plans for Toyota’s batteries.
LGES is thinking of producing Toyota’s batteries at one of its Ultium Cells Plants. Through a joint venture, LGES and General Motors (GM) are building three Ultium Cell Plants. One of the plants is located in Lansing, Michigan, only 160 km from LGES’ Holland plant, making the logistical shift feasible.
According to a South Korean media outlet, LGES confirmed its considerations concerning Toyota’s supply deal.
“This is just one of several scenarios being considered during the rebalancing (business restructuring) process and that nothing has been concretely decided yet,” LGES stated.
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