September 26, 2022

Honda Motor and LG Energy to build $4.4 billion US electric battery factory

Honda Motor and LG Energy to build $4.4 billion US electric battery factory

TOKYO / WASHINGTON (Reuters) – Honda Motor Company of Japan (7267.T) It 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 on Monday.

Battery makers are looking to ramp up production in the United States as the shift toward electric vehicles (EV) could increase as the country enforces stricter regulations and tightens tax credit eligibility.

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

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The companies are aiming for annual production capacity of about 40 gigawatt-hours with the batteries supplied exclusively to Honda’s North American facilities to power the Honda and Acura EV models.

The pair are expected to establish a joint venture before the plant is built, with construction planned to begin 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 ensure Ohio chooses this new electric battery plant.” The sources familiar with the matter said that the announcement of the site could come within weeks.

The US government has been pushing policies designed to bring more batteries and electric car manufacturing into the country.

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

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

White House Deputy National Climate Adviser Ali Zaidi praised the “huge investment” of Honda and LG that he said was spurred by climate and infrastructure legislation.

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

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

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

LG Energy Solution, which is primarily engaged in the development of lithium-ion battery materials and the next generation of batteries, 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 Power Corporation, a unit of Panasonic Technology Holding Group (6752.T) And Big Tesla (TSLA.O) The supplier, he said, has chosen Kansas as the location for a new battery factory with investments of up to $4 billion. Read more

Earlier this year, Honda set a goal to roll out 30 electric vehicle models globally and produce about 2 million electric vehicles annually by 2030. Read more

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Additional reporting by Satoshi Sugiyama and Hekyung Yang in Seoul and David Shepardson in Washington; Editing by Rashmi Aish Krishna Chandra Ellory, Kristen Donovan and Chris Reese

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