Honda Motor and LG Energy to build a $4.4 billion electric vehicle battery plant in the US

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

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

The location of the plant has not been finalized, the companies said, but two people briefed on the matter confirmed reports that Honda is seriously considering Ohio, where Honda’s main US factory 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 plant, with construction expected to start in early 2023 and mass production by the end of 2025.

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

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

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

The Honda Motor logo is displayed 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 “massive investment” which he said was catalyzed by climate and infrastructure legislation.

US Energy Secretary Jennifer Granholm said the administration was bringing back domestic battery manufacturing to provide Americans with high-paying jobs that will fuel the electric vehicle revolution.

California announced a plan last week 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 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 is mainly engaged in the development of materials for lithium-ion batteries and next-generation batteries, also supplies 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 tech 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 plant with an investment of up to $4 billion. read more

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

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

Our standards: The Thomson Reuters Trust Principles.

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