(Green Car Reports) — Toyota on Wednesday announced a “long-term” battery supply agreement with LG Energy Solution, which the automaker claims will secure batteries for U.S. EV production.

Under the contract, LG will supply battery modules at an annual capacity of 20 gigawatt-hours starting in 2025, according to a Toyota press release. Comprised of nickel-manganese-cobalt-aluminum (NMCA) pouch-type cells, the modules will be manufactured at LG’s Michigan factory, which will receive a roughly $3 billion investment to add new production lines for the Toyota contract.

LG Energy Solution pouch-type battery cell

The batteries will power U.S.-made Toyota EVs, including a new electric model that will be manufactured at Toyota’s Kentucky factory starting in 2025. Toyota confirmed the new EV, a three-row electric SUV, just earlier this year.

Prior to that, Toyota hinted of future U.S.-built EVs with an accelerated battery plan. That starts with a North Carolina plant that’s primarily supplying hybrid batteries. Located in Randolph County, the $1.3 billion plant will produce enough cells for up to 1.2 million “electrified vehicles” per year, Toyota previously said. The initial output of the plant is bound for hybrids, with a potential shift toward EVs later in the decade.

Toyota EV concept for 2026

Toyota has also teased a sleek, futuristic-styled EV flagship—likely to be previewed at the 2023 Tokyo auto show later this month—and underscored it’s aiming for a “base volume” of 1.5 million BEVs in 2026, so things will accelerate from here.

Related Articles

However, Toyota still hasn’t updated its U.S. EV targets since estimating in 2021 that 85% of its U.S. vehicles sold in 2030 would still have tailpipes. But added U.S. battery production gives the automaker the headroom for more ambitious EV sales targets.