Honda Motor Co. and LG Energy Solution announced August 29 the two companies would form a joint venture to build a U.S. factory for electric vehicle batteries. In an official statement, the companies said the plant will cost $4.4 billion dollars and feature an annual production capacity of 40GWh.
According to a joint statement from the companies, the move to build the factory in the U.S. is meant to help supply Honda’s stake in the “rapidly-growing North American EV market.”
The “pouch-type” batteries the factory produces will supply North American Honda plants. In a statement, Honda CEO Toshihiro Mibe said the new factory would give U.S. Honda plants local access to electric vehicle batteries. “Aligned with our longstanding commitment to build products close to the customer, Honda is committed to the Local procurement of EV batteries,” he said.
Although neither company named a specific location in the United States for the factory, the Wall Street Journal reported that the company plans to build it in Ohio, citing anonymous sources. Honda already has two assembly plants, an engine plant and a transmission plant in the state, though it has manufacturing sites in Alabama and Indiana as well, along with a transmission plant in Georgia.
Honda has been relatively slow to adopt full battery-electric vehicles, despite early leadership in developing hybrid electric-gasoline vehicles, and the company does not yet offer a mass-market fully electric vehicle in the United States. Despite Honda’s previous focus on using its batteries to build more “electrified” cars, which include battery-gasoline hybrids and hydrogen fuel cell vehicles, the company now plans to move entirely into electric and hydrogen vehicles by 2040.
“Our joint venture with Honda, which has significant brand reputation, is yet another milestone in our mid- to long-term strategy of promoting electrification in the fast-growing North American market,” said Youngsoo Kwon, CEO of LG Energy Solution.
LG, a Korean electronics company, is increasingly a major player in EV battery joint partnerships with major automakers. In 2014, LG Chem formed an agreement with Renault to develop batteries for electric vehicles. After LG Energy Solution was established in 2020, it formed the Ultium Cells LLC joint venture with General Motors Co. in 2021, then joined another such venture with Stellantis the following year to build batteries in Canada.