LG Energy Solution, Toyota Tsusho launch battery recycling JV in US

LG Energy Solution Ltd. has set up a battery recycling joint venture with Toyota Tsusho Corp. in the US, deepening the South Korean battery giant’s alliance with the world’s largest automaker, Toyota Motor Corp., in the electric vehicle (EV) sector.

LG Energy Solution on Thursday announced that the JV, called Green Metals Battery Innovations LLC (GMBI), will dismantle and shred battery production scrap to extract black mass, which contains valuable raw metals, such as nickel, cobalt and lithium.

The extracted black mass will be processed later to recover raw materials contained within.

GMBI – 51% owned by Toyota Tsusho America Inc. and 49% by LG Energy Solution Michigan – will initially process up to 13,500 tons of battery production scrap annually, enough for more than 40,000 EV battery units.

The facility, located in Winston-Salem, North Carolina, is slated to begin operations in 2026.

LG Energy Solution will supply scrap generated during the production of EV batteries for Toyota Motor’s manufacturing operations in North America, and then the extracted materials will be reused to produce EV batteries for Toyota Motor.

Toyota Tsusho, a trading arm of the Toyota Group, has a decades-old track record of recycling experience. It has recently raised the stakes in the materials and parts procurement business.

It is currently building a battery plant in the US with its sibling Toyota Motor.

10-YEAR BATTERY SUPPLY DEAL

In late 2023, LG Energy won a 10-year deal to supply EV batteries to Toyota Motor.

Under the deal, the Korean battery major will supply high-nickel NCMA (nickel, cobalt, manganese, aluminum) pouch-type batteries to Toyota at an annual capacity of 20 gigawatt hours (GWh) from 2025 to 2035.

With the latest deal, the two partners’ ties will deepen, especially in decarbonization efforts.

LG also expects the JV will enable it to secure a competitive battery recycling infrastructure in North America, where its other major clients and partners – General Motors Co., Ford Motor Co., Stellantis NV, Hyundai Motor Group and Honda Motor Co. – operate EV-manufacturing plants.

"This joint venture will not only help secure a stable supply of key battery materials but also enhance the competitiveness of our recycling business in North America," Kang Chang-beom, chief strategy officer (CSO) of LG Energy Solution, said in a company news release.

Welcoming the new partnership, Toyota Tsusho Chief Operating Officer Masaharu Katayama said, “This joint venture is a significant step toward realizing a circular economy for batteries, which is essential for building a sustainable mobility society."

ADDITIONAL EV COLLABORATION WITH KOREAN COMPANIES

On Wednesday, the Japanese partner announced its investment of $110 million in SK Nexilis Malaysia Sdn. Bhd., an subsidiary of SK Nexilis Co., the world’s largest copper foil maker under the SK Group, whic is also Korea’s second-largest conglomerate.

It expects the investment, separate from its JV with LG Energy, will help it secure a stable supply of high-quality copper foil, an essential material for automotive battery production, for battery manufacturers in Japan and North America.

It also plans to work with SK Nexilis to develop copper foil for next-generation EV batteries.

With the investment, the Korean partner has secured cash to shore up its financial health after suffering a cumulative loss of 225.6 billion won ($163.3 million) in the past two years due to a prolonged slump in EV demand.  

Write to Sookyung Seo at skseo@hankyung.com
Jennifer Nicholson-Breen edited this article.