On October 4, 2023, LG Energy Solution (LGES) announced a major $3 billion investment in its battery manufacturing plant in Michigan. The investment is part of a new strategic partnership and supply agreement with Toyota, aimed at strengthening the electric vehicle (EV) supply chain and expanding the production of lithium-ion batteries for Toyota’s growing lineup of EVs in North America.
Details of the Investment and Partnership
The $3 billion expansion will significantly boost production capacity at LGES’s existing facility in Holland, Michigan, with plans to manufacture high-nickel NCMA (nickel, cobalt, manganese, aluminum) lithium-ion batteries—a technology known for higher energy density and longer vehicle range. The batteries will be supplied to Toyota Motor North America starting in 2025, supporting the Japanese automaker’s plans to scale up EV production in the U.S. and meet growing market demand.
As part of the agreement, LGES will supply battery modules to Toyota for use in EVs assembled at its Kentucky plant, where Toyota is ramping up efforts to manufacture vehicles on its dedicated EV platform. The supply deal underscores the importance of building a localized battery ecosystem as automakers prepare to meet stricter emissions standards and accelerate the shift to electric mobility.
Boost to Michigan’s Economy and U.S. EV Manufacturing
The expansion is expected to create 1,200 new jobs in Michigan, further cementing the state’s role as a hub for EV manufacturing and battery innovation. The announcement drew praise from Michigan officials and economic development leaders, who emphasized the project’s impact on job creation and the state’s competitiveness in the clean energy economy.
Michigan Governor Gretchen Whitmer welcomed the investment, stating that it aligned with the state’s efforts to lead in EV manufacturing and sustainability. “LG Energy Solution’s historic expansion will create good-paying jobs, strengthen our auto industry, and position Michigan at the forefront of battery production for years to come,” she said.
Toyota’s Push Toward Electrification
For Toyota, the partnership with LGES marks a significant step in its electrification strategy. The world’s largest automaker by sales has been expanding its investment in electric vehicle technologies, aiming to launch 30 EV models globally by 2030 and to sell 3.5 million EVs annually by that year.
Although Toyota has historically prioritized hybrid technologies, the company has faced growing pressure to catch up in the battery electric vehicle (BEV) market. Partnering with LGES provides Toyota with a reliable, high-capacity battery supplier in North America—critical for both reducing supply chain risks and complying with Inflation Reduction Act (IRA) requirements for U.S.-based manufacturing incentives.
Industry-Wide Shift to Domestic Battery Supply
The announcement comes amid a broader shift by automakers and battery manufacturers to localize battery production in response to geopolitical tensions, supply chain disruptions, and new U.S. policies incentivizing domestic manufacturing. The LGES-Toyota deal is one of many such collaborations reshaping the landscape of EV production in North America.
LG Energy Solution, already a key supplier to several automakers including General Motors, Hyundai, and Honda, continues to invest heavily in U.S.-based manufacturing. The Michigan expansion brings LGES’s total committed U.S. investment to over $10 billion, reflecting the company’s aggressive strategy to dominate the global EV battery market.
Conclusion
The October 4 announcement of LG Energy Solution’s $3 billion investment in its Michigan battery plant represents a pivotal moment for the U.S. electric vehicle industry. In partnership with Toyota, the expansion will accelerate EV production, strengthen domestic supply chains, and contribute to the broader transition toward clean transportation. As the auto industry races toward an electrified future, collaborations like this are poised to play a critical role in reshaping mobility, manufacturing, and energy infrastructure across North America.
