Toyota Motors is bolstering its electric vehicle capability in the United States with a new supply agreement with Ioneer LTD’s Rhyolite Ridge mining project. Under the new agreement, Ioneer will supply 4,000 tons of lithium carbonate per year to the Toyota-Panasonic battery company.
Lithium, a critical component of electric vehicle batteries, is in high demand as electric vehicle sales continue to break records. The deal comes as a new climate bill includes an extension of the tax credit for electric vehicles.
However, automakers would have to source lithium, among other vital minerals, domestically or through countries that have a free trade agreement with the United States to get the credit. In fact, Ioneer Executive Chairman James Calaway says:
The whole purpose of this agreement is for this lithium to be used in the United States.
The lithium will be enough to make about 150,000 EV batteries, depending on the model. Toyota aims to develop 30 different battery electric vehicles by 2030. Additionally, according to the company’s latest filing with the SEC, Toyota expects 3.5 million electric vehicle sales per year by 2030.
At the same time, supplies should start in 2025, depending on authorizations and funding.
A victory for Toyota in the EV race?
In 2019, Electrek announced that Toyota and Panasonic were forming a partnership to produce EV batteries. So far, the company is working on building affordable batteries on a large scale.
The new supply agreement is a big step for Toyota, which is looking to increase production in key markets. Although Japan is Toyota’s home market, the company generates the most sales in North America. With that in mind, the new supply deal will help the automaker establish itself in its biggest market.
Not only that, but the US electric vehicle market is heating up. If the climate bill passes and electric vehicle tax credits are extended, it could create an advantage for domestic automakers.
Several American electric vehicle companies plan to increase production this year. Not to mention that traditional automakers like Ford and GM are beefing up their own EV capability. That said, this deal looks like a win for Toyota and its plans to expand electric vehicle production in the United States.
If Toyota is to achieve its goal of selling 3.5 million electric vehicles per year, the North American market will play a key role.
For now, the Japanese automaker’s effort begins with the Toyota bZ4x electric SUV which will arrive in US dealerships later this year.
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