LG, Toyota team up for US battery recycling to bypass China supply risks

Korea’s leading battery manufacturer, LG Energy Solution, announced Thursday that it will establish a battery recycling joint venture with Japan's Toyota Group in the US, in a move to strengthen its China-independent battery material supply chain for local production.

LG Energy Solution and Toyota Tsusho Co., the trading arm of the Japanese mobility giant, recently signed an agreement to establish Green Metals Battery Innovations in Winston-Salem, North Carolina. The companies have not disclosed the ownership ratio or investment scale.

The joint venture plans to build an electric vehicle battery preprocessing plant that will handle used batteries and production scraps, primarily from LG’s local operations supplying Toyota, as well as additional materials collected by Toyota Tsusho.

Once completed in 2026, the plant will be capable of producing up to 13,500 metric tons of “black mass” annually — a mixed metal material extracted from used batteries — enough to recover resources from more than 40,000 electric vehicles.

The black mass will be further processed to extract key cathode materials such as nickel, lithium and cobalt, and will be reused in Toyota’s North American electric vehicle production, the companies said.

“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,” said Kang Chang-beom, chief strategy officer at LG Energy Solution.

“We are fully committed to leading the recycling market through innovative and differentiated technologies.”

The collaboration comes amid strict requirements under the US Inflation Reduction Act, which prohibits tax incentives for vehicles using materials sourced from foreign entities of concern, including China. According to the US Energy Information Administration, China accounts for over 60 percent of the world’s cobalt and lithium processing capacity.

LG Energy Solution expects to leverage Toyota Tsusho’s industry-leading battery processing technology to establish a localized value chain in North America, covering everything from battery production to recycling.

The company aims to build its circular battery strategy in the region, moving beyond the recent bankruptcy of Li-Cycle, once the region’s largest battery recycler, in which LG Energy Solution and LG Chem jointly held a 2.6 percent stake.

“This collaboration holds deep significance in strengthening our strategic partnership with the Toyota Group across the entire battery lifecycle,” said an LG Energy Solution official. “We will continue close cooperation to help build a sustainable ecosystem for the North American EV and battery industry.”