Toyota to the rescue! This gigantic Japanese automaker is shifting a $1.5 billion battery order it had placed with LG Energy Solution from one facility to another manufacturing plant in Michigan after GM pulled out of a deal it had made with the battery supplier.
Toyota Picks Up GM’s Slack
As electric vehicle sales fell behind expectations, the American automaker announced back in December that it was selling off its stake in the joint-venture LG battery factory located in Lansing, Michigan. GM’s share of this facility is worth $1 billion.
Losing such a huge partner was a massive blow to LG, which has been searching for new customers to buy its batteries. And this is where Toyota comes in. Automotive News reports that the car manufacturer has agreed to “transfer an existing order from another LG plant in Michigan when LG fully acquires the Lansing facility.” According to Toyota, this is expected to be completed in the spring, and will be worth a whopping $1.5 billion.
The LG batteries Toyota is set to purchase will be for either pure electric vehicles or hybrids. The Japanese automaker currently offers 30 electrified models in the U.S., which is more than any other automaker.
Automotive News also reports that South Korean companies have invested some $54 billion in electric vehicle battery plants in the U.S.. Unfortunately for them, EV sales have been disappointing in America, but maybe there’s another option. Aside from car companies, LG could also sell battery packs to other customers for use in stationary energy storage systems, which would help eat up some of the company’s production capacity. According to a statement from LG, “This is part of our strategic objective to further optimize our investments in North America and also respond to the needs from global automakers.”
EVs Are The Future, But We Still Live In The Present
Compared to combustion-powered cars and trucks, electric vehicles are incredibly simple. There are no pistons or rings, no timing chains, camshafts, catalytic converters, fuel injectors, or valve springs to worry about. EVs have dramatically fewer moving parts, a huge advantage, but the problem with these vehicles is the batteries, which are bulky, heavy, and incredibly expensive.
The plant GM and LG were partnering on was announced in January of 2022. This facility was intended to create some 4,000 jobs and was part of a massive $35 billion investment by the automaker, which, by 2025, had aimed to introduce 30 electric vehicles.
Read the full article here