Instead of Setting up a Joint Venture Battery Plant
Battery cooperation between LG Energy Solution and Toyota Motor has emerged as a hot issue in the world battery industry.
LG Energy Solution is reportedly leaning towards supplying batteries to Toyota instead of establishing a battery joint venture. It is highly likely to supply pouch type batteries to the Japanese carmaker.
Toyota has thus far used prismatic batteries, but it appears to be moving towards battery type diversification, analysts say. Toyota wants to quickly secure batteries as the Inflation Reduction Act (IRA) is enforced in the United States this year.
LG Energy Solution is currently rolling out pouch type batteries at its factory in Michigan of the United States.
Toyota, a latecomer in the electric vehicle business, announced in August 2022 that it will invest about 7 trillion won in the United States and Japan to foster the electric vehicle industry. At the time, the automaker presented a plan to build its own battery factory in the United States instead of establishing a joint factory with battery companies. Industry insiders expect that Toyota will diversify battery suppliers in the future and, at the same time, focus on producing batteries on its own.
Some experts believe that LG Energy Solution and Toyota will keep the final contract for battery supply under wraps. “When a battery company inks a contract to supply products to an automobile company, the details of the contract are usually not disclosed to the outside world,” an industry insider explained.
Analysts forecast that cooperation between the two companies will become more visible within the first quarter of 2023 at the earliest. LG Energy Solution is strengthening cooperation with the Japanese automobile industry. It is supplying batteries to Nissan and is establishing a joint venture with Honda.