- LG Energy Solution will supply Toyota with electric vehicle batteries that will be assembled in the United States
- “Inflation has increased investment amounts and labor costs have risen for various reasons. Things are difficult. The IRA tax break is great, and it is compensated in the US market. That is why we are investing, building factories and sourcing in the US,” said LG Energy Solution CEO Youngsoo. Kwon in an exclusive interview.
- LG Energy Solution will invest about $3 billion “to establish new production lines for battery cells and modules exclusively for Toyota, scheduled for completion in 2025.”
South Korean company LG Energy Solution has signed an agreement to supply Toyota, the world’s largest automaker, with Lithium-ion batteries The companies said on Wednesday that the electric vehicles will be assembled in the United States.
The deal will support Toyota’s expanded battery electric portfolio, which includes a new model that will be assembled at a manufacturing plant in Kentucky – the world’s largest – starting in 2025.
“The only thing I wanted to change is the fact that we don’t have any business with the No. 1 company, Toyota,” Youngsoo Kwon, CEO of LG Energy Solution, said in an exclusive interview with CNBC that aired Thursday.
“We now have nine of the top 10 automakers as customers,” Kwon said, adding that LG Energy Solution will supply 20 gigawatts worth of batteries to Toyota every year starting in 2025.
Toyota was the world’s best-selling automobile manufacturer For three consecutive years, it sold approximately 10.5 million cars in 2022.
Toyota shares listed on the Tokyo Stock Exchange rose by 2.91% in morning trading on Thursday.
LG Energy Solution also supplies other automotive giants such as the American General Motors, the South Korean Hyundai, and the Japanese Honda. Less than five months ago, LG Energy Solution said it would build a $4.3 billion electric vehicle battery factory in the United States with Hyundai, in an effort to take advantage of tax breaks.
Buyers of cars made in the United States are entitled to tax credits of up to $7,500 under the Inflation Reduction Act.
“Inflation has increased investment amounts and labor costs have risen for various reasons. Things are difficult. The IRA tax break is large, and it is offset in the US market. That is why we are investing, building factories and sourcing in the US,” Kwon said.
LG Energy Solution will invest about KRW 4 trillion ($3 billion) “to establish new production lines for battery cells and modules exclusively for Toyota, scheduled for completion in 2025.”
The Japanese automaker aims to offer 30 models of battery-powered electric cars across its Toyota and Lexus brands and produce up to 3.5 million battery-powered cars annually by 2030.
LG Energy Solution is offline The third largest in the world The electric car battery product is named after Chinese electric car company BYD, according to data from South Korean energy market research firm SNE Research.
Chinese companies dominate the sector even as the adoption of electric cars increases globally. China’s CATL remains firstaccounting for 36.6% of the global electric vehicle battery market from January to July of this year, according to SNE Research.
“It’s basically a competition between Chinese and Korean companies, although we have Japan’s Panasonic as well. I think it’s too early to fully assess the capabilities of Chinese battery makers,” Kwon said.
“CATL manufactures mostly outside China. It is very easy to maintain production within China. It is a global business, so it needs to involve global operations.”
“It would have been easy for us to stay within South Korea. But we faced enormous challenges in Poland and the United States, and I think whether the Chinese players are able to do well in their global operations will be the factor that decides who will win between Chinese and Korean companies,” Kwon said.
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