Honda Motor Co., Ltd. and LG Energy Solution (LGES) have bared plans to build a $4.4 billion (over Php 250 billion) plant in the U.S. The facility will be used to assemble batteries for both Honda and Acura electric vehicles (EVs) to be sold in the North American market.
Honda and LG plan to begin manufacturing EV batteries at a dedicated U.S. facility by 2025
Both companies will establish a joint venture in the U.S. for this purpose, subject to approval by authorities. Construction of the factory is expected to start in early 2023, with mass production scheduled to commence by 2025.
Pouch-type lithium-ion batteries produced by the facility will be supplied to Honda’s North American plant, with an estimated maximum production capacity of 40 Gigawatt-hours. This translates to an estimated 400,000 EVs annually.
In a statement, Honda and LGES said that they mutually agree on the importance of having a stable supply of batteries as the North American EV market is rapidly growing.
Both companies agree that the North American market for EVs is growing rapidly
“Aligned with our longstanding commitment to build products close to the customer, Honda is committed to the local procurement of EV batteries which is a critical component of EVs,” said Honda President & CEO Toshihiro Mibe.
“At LGES, we aim to establish ourselves as a leading battery innovator with the ultimate goal of earning the trust and respect of our valued customers,” commented LGES CEO Kwon Young-soo.
“We will contribute to the rapidly growing North American electrification market as a new milestone in our medium- to long-term strategy by cooperating with Honda’s electrification promotion and providing customers with sustainable energy solutions,” he added.
Shares of Honda went up by 1.8 percent following the announcement of the joint venture Monday.
The factory will supply enough batteries to power an estimated 400,000 Honda and Acura EVs annually
The automaker previously announced plans to build 800,000 EVs in North America by 2030. Honda says it expects EVs to account for between 40 and 50 percent of its total production in the market by that time. The company plans to invest 5 trillion yen (over Php 2.02 trillion) to launch 30 new EVs by the next decade, seen as one of the most aggressive electrification expansions in Japan.
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