Honda Motor and LG Energy to Build $4.4 Billion Electric Vehicle Battery Plant in US

TOKYO/WASHINGTON, Aug 29 (Reuters) – Japanese Honda Motor Co. (7267.T) will build a new $4.4 billion lithium-ion battery factory for electric vehicles in the United States with Korean battery supplier LG Energy Solution Ltd (373220.KS)the two companies announced on Monday.

Battery makers are looking to ramp up production in the United States, where a shift to electric vehicles (EVs) could increase as the country implements tougher regulations and tightens tax credit eligibility.

The location of the plant has not been finalized, the companies said, but two people briefed on the matter confirmed that Honda is seriously considering Ohio, where Honda’s main US plant is located.

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The companies are targeting 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 establish a joint venture before building the factory, with construction expected 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 plant.” Sources briefed on the matter said an announcement on the location could come in a few weeks.

The US government has pushed policies designed to bring more battery and electric vehicle manufacturing to the country.

President Joe Biden signed a $430 billion climate, healthcare and tax bill this month that would make electric vehicles assembled outside of North America ineligible for tax credits. . Read more

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

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

U.S. Energy Secretary Jennifer Granholm said the administration is bringing back “domestic battery manufacturing to provide Americans with well-paying jobs that will propel the electric vehicle revolution.”

California last week announced a plan requiring all new vehicles sold in the state by 2035 to be electric or plug-in hybrid electric. Read more

The two companies said a combination of strong local EV production and rapid battery supply would put them “in the best position to target the rapidly growing North American EV market.”

LG Energy Solution, which is mainly engaged in the development of lithium-ion battery materials and next-generation batteries, also provides batteries for electric vehicles 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 unit of technology conglomerate Panasonic Holdings Corp (6752.T) and a major Tesla Inc (TSLA.O) supplier, said it chose Kansas as the site for a new battery plant with an investment of up to $4 billion. Read more

Earlier this year, Honda set a goal of rolling out 30 electric vehicle models globally and producing around 2 million electric vehicles a year by 2030. 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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