South Korean battery manufacturer LG Energy Solution (LGES) will invest KRW 4 trillion ($3 billion) in its Michigan facility to supply Toyota Motor North America with 20 gigawatt-hours (GWh) of modules annually.

The companies said in a joint statement Wednesday that first deliveries are planned for 2025. The NCMA pouch-type cells will power a new BEV model Toyota will produce in Kentucky, where the modules will be initially assembled into packs and equipped onto BEVs.

The undisclosed agreement was described by the companies as a “landmark deal” as it is LGES’ largest single supply agreement outside of joint venture agreements. It will also be crucial in helping Toyota’s electrification goals in North America, making the Japanese carmakers’ EVs eligible for local incentives. Globally, Toyota is planning a line-up of 30 BEV models by 2030, Kallanish notes.

“We’re excited to have Toyota, the best-selling global automaker, as our new customer,” comments LGES chief executive Youngsoo Kwon. “The agreement also presents another big opportunity for us to strengthen our production capacity in North America, thereby bringing more real-life, large-scale progress toward electrification in the region.”

The battery manufacturer has eight gigafactories operating or under construction in North America. Its Michigan-based production lines already supply Ford, Stellantis, Volvo and General Motors.