Honda, LG to Invest Over $4 Billion in US EV Battery Plant
Honda and LG Energy Solution (LGES) announced today plans to invest $4.4 billion in a new electric vehicle battery plant in the U.S., through a newly-formed joint venture. The new plant will produce lithium-ion batteries in the U.S. to power Honda and Acura EV models for the North American market.
The formation of the new JV follows the launch last year by Honda of aggressive electrification plans for its vehicle fleet, including goals to make battery-electric and fuel cell electric vehicles represent 100% of its vehicle sales by 2040, progressing from sales of 40% by 2030 and 80% by 2035 in all major markets, including North America.
Toshihiro Mibe, Honda Motor Co. President & CEO, said:
“Honda is working toward our target to realize carbon neutrality for all products and corporate activities the company is involved in by 2050. 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.”
Honda and LGES aim to start construction on the new plant in early 2023, and to begin mass production of advanced lithium-ion battery cells by the end of 2025. The plant will produce pouch-type batteries supplied exclusively to Honda facilities in North America, with anticipated annual production capacity of approximately 40GWh.
The site for the new plant has not yet been finalized.
The new plant will form part of a rapidly expanding North American EV and battery production ecosystem, as major automakers ramp investments to meet growing demand for electric vehicles, and government-imposed deadlines to shift to zero-emission vehicles (ZEVs), such as the Biden administration’s goal for ZEVs to make up half of new vehicle sales in the U.S. by 2030, and last week’s approval in California of plans to require all new car, pickup truck and SUV sales in the state to be ZEVs by 2035.
LGES, which was spun out of chemical giant LG Chem in 2020, has partnered with several of the largest automakers to grow their battery capacities, including recent deals announced with Stellantis and General Motors.
Youngsoo Kwon, CEO of LG Energy Solution, said:
“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. Since our ultimate goal is to earn our valued customers’ trust and respect, we aspire to position ourselves as a leading battery innovator, working with Honda in achieving its core initiatives for electrification, as well as providing sustainable energy solutions to discerning end consumers.”