Honda Motor, LG Energy to build $4.4 billion US EV battery plant

TOKYO/WASHINGTON (Reuters) – Japan’s Honda Motor Co 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, the two companies said on Monday.

Battery makers are seeking to increase production in the US, where a shift to electric vehicles (EVs) could increase as the country implements tighter regulations and boosts 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 U.S. plant is located.

The companies are aiming for an annual production capacity of around 40 GWh with the batteries being supplied exclusively to Honda’s North American facilities to power Honda and Acura EV models.

The pair are expected to form a joint venture ahead of building the plant, with the start of construction planned for early 2023 and mass production by late 2025.

Ohio Gov. Mike DeWine said his administration is working with Honda and LG “to make sure they choose Ohio for this new battery electric plant.” Sources briefed on the matter said an announcement on the location could come in weeks.

The US government has promoted policies designed to bring more battery and EV production to the country.

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

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

US Energy Secretary Jennifer Granholm said the administration is bringing back “domestic battery manufacturing to provide Americans with good-paying jobs that will fuel the EV revolution.”

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

The two companies said a combination of strong local electric vehicle production and timely supply of batteries would put them “in the best position to target the fast-growing North American electric vehicle market.”

LG Energy Solution, which mainly develops lithium-ion battery materials and next-generation batteries, also supplies EV batteries and has signed joint venture agreements with General Motors, Hyundai Motor Co and Stellantis.

In July, Panasonic Energy Co, a unit of technology group Panasonic Holdings Corp and a major supplier to Tesla Inc, said it had chosen Kansas as the site for a new battery factory with an investment of up to $4 billion.

Earlier this year, Honda set a goal of launching 30 EV models worldwide and producing around 2 million EVs annually by 2030.

(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)

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