South Korea's LG New Energy Company (LGES) announced on Wednesday that it has signed an agreement with Japan's Toyota Motor Corporation to supply lithium-ion batteries used in the production of electric vehicles to Toyota's U.S. factories. The deal will support Toyota's expanding lineup of battery electric vehicles, including a new model that will be assembled starting in 2025 at a plant in Kentucky, the U.S., Toyota's largest plant globally.
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LG New Energy CEO Youngsoo Kwon said in an interview on Thursday: "One thing I want to change is that we don't have any business with Toyota, the world's largest. So now nine of the 10 top automakers are our customers."
He added that starting from 2025, LG New Energy will supply 20gw batteries to Toyota every year. The company will invest approximately 4 trillion won ($3 billion) "to establish a new production line dedicated to producing batteries and modules for Toyota, which is expected to be completed in 2025."
Kwon said of the competition with Chinese companies such as CATL: "This is essentially a competition between Chinese and Korean companies, although there is also Japan's Panasonic. I think it is too early to fully assess the capabilities of Chinese battery manufacturers."
He said: "The production of CATL is mainly outside China. It is very easy to keep the production in China. This is a global business, so it needs to involve global operations."
"It's easy for us to stay in South Korea. But we face huge challenges in both Poland and the United States. I think whether Chinese companies can do global business well will be the factor that determines who will win, Chinese companies or Korean companies."
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