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Honda Motor and LG Energy to Build $4.4 Billion US EV Battery Plant

TOKYO/WASHINGTON, Aug. 29 (Reuters) – Japan’s Honda Motor Co (7267.T) will build a new $4.4 billion lithium-ion battery plant for electric vehicles in the United States with Korean battery supplier LG Energy Solution Ltd (373220 .KS), the two companies said Monday.

Battery makers are looking to increase production in the US, where a shift to electric vehicles (EV) could increase as the country implements stricter regulations and tightens eligibility for tax credits.

The plant’s location has not yet been finalized, the companies said, but two people who were briefed on the matter confirmed that Honda is seriously considering Ohio, where Honda’s main U.S. manufacturing facility is located.

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The companies aim for an annual production capacity of approximately 40 GWh with the batteries supplied exclusively to Honda facilities in North America to power Honda and Acura EV models.

The pair are expected to form a joint venture before the plant is built, with construction scheduled to start in early 2023 and mass production by the end of 2025.

Ohio Governor Mike DeWine said his administration is working with Honda and LG “to make sure they choose Ohio for this new electric battery factory.” The sources informed about the matter said an announcement about the location could come in a few weeks.

The US government has been pursuing a policy of bringing more battery and EV manufacturing to the country.

President Joe Biden signed a $430 billion climate, health care and tax bill this month that makes electric vehicles assembled outside North America ineligible for tax credits. read more

The Honda Motor logo is featured at the 43rd Bangkok International Motor Show, in Bangkok, Thailand, March 22, 2022. REUTERS/Athit Perawongmetha

White House deputy national climate adviser Ali Zaidi praised Honda LG’s “huge investment” which he says was catalyzed by climate and infrastructure legislation.

US Secretary of Energy Jennifer Granholm said the government is “reducing domestic battery production to provide Americans with high-paying jobs that will power the EV revolution.”

California last week announced a plan that requires all new vehicles sold in the state by 2035 to be electric or plug-in electric hybrids. read more

The two companies said a combination of strong local production of electric vehicles and the on-time delivery of batteries would put them “in the best position to target the fast-growing North American EV market.”

Mainly engaged in the development of materials for lithium-ion and next-generation batteries, LG Energy Solution also supplies EV batteries and has signed joint venture agreements with General Motors (GM.N), Hyundai Motor Co (005380 .KS) and Stellantis (STLA.MI). read more

In July, Panasonic Energy Co, a part of technology conglomerate Panasonic Holdings Corp (6752.T) and a major Tesla Inc (TSLA.O) supplier, said it had selected Kansas as the site for a new battery factory with an investment of up to $4 billion. . read more

Earlier this year, Honda set a target to roll out 30 EV models globally by 2030 and produce approximately 2 million EVs per year. read more

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Reporting by Satoshi Sugiyama and Heekyong Yang in Seoul and David Shepardson in Washington; Editing by Rashmi Aich Krishna Chandra Eluri, Kirsten Donovan and Chris Reese

Our Standards: The Thomson Reuters Trust Principles.

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