Toyota Motors is boosting its US EV capacity with a new supply agreement with Ioneer LTD’s Rhyolite Ridge mining project. According to the new deal, Ioneer will supply 4,000 tonnes of lithium carbonate annually to the Toyota-Panasonic battery venture.
Lithium, a critical component of EV batteries, is in high demand as electric vehicle sales continue to break records. The deal comes as a newly proposed climate bill includes an EV tax credit expansion.
However, automakers would need to source lithium, among other vital minerals, domestically or through countries with a free trade agreement with the US to get the credit. In fact, Ioneer’s executive chairman, James Calaway, said:
The whole purpose of this agreement is for this lithium to be used in the United States.
The lithium will be enough to make around 150,000 EV batteries, depending on the model. Toyota is aiming to develop 30 different battery electric vehicles by 2030. Furthermore, according to the company’s latest SEC filing, Toyota forecasts 3.5 million in EV sales annually by 2030.
At the same time, supplies are expected to start in 2025, depending on permits and funding.
A win for Toyota in the EV race?
In 2019, Electrek reported that Toyota and Panasonic were forming a partnership to produce EV batteries. So far, the venture is working on building affordable batteries at scale.
The new supply agreement is a big step for Toyota, which is looking to ramp production in key markets. Although Japan is Toyota’s home market, the company generates the most sales in North America. With this in mind, the new supply agreement will help the automaker establish itself in its largest market.
Not only that, but the US EV market is heating up. If the climate bill passes and the EV tax credits are extended, it could create an advantage for domestic automakers.
Several US EV companies are expecting to ramp up production this year. Not to mention legacy automakers like Ford and GM are boosting their own EV ability. That said, this deal looks like a win for Toyota and its plans to expand EV production in the US.
If Toyota is to reach its goal of selling 3.5 million EVs annually, the North American market will play a critical role.
For now, the Japanese automaker’s effort starts with the Toyota bZ4x electric SUV hitting US dealerships later this year.
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Author: Peter Johnson