Honda, LG announce $4.4 billion US battery factory for EVs
By Matt McFarland, CNN Business
Honda has struck a deal with Korean battery giant LG Energy Solution to build a $4.4 billion US factory to supply its electric vehicles.
The partners haven’t announced where in the United States they’ll build the factory. They said in a joint news release Monday that they plan to begin construction in early 2023 to prepare for mass production by the end of 2025. Honda has produced cars such as the Accord sedan and the midsize CR-V at its factory in Marysville, Ohio, since 1982.
Honda and LG Energy Solution said they picked the US because local production and a “timely supply of batteries” would best position them to succeed in the growing North American electric vehicle market.
Honda does not currently offer an electric vehicle in the US, but plans to launch an SUV, the Prologue, in 2024. Honda expects to launch 30 electric vehicle models globally by 2030 and to sell exclusively electric vehicles in North America by 2040.
The automaker’s planned factory may help it benefit from the new electric vehicle tax credits, which encourage automakers to produce batteries in North America.
Honda said earlier this year that it planned to spend about $36 billion on electric vehicles and software in the next 10 years.
It isn’t the only automaker to announce plans for North American battery production in roughly the last year. Hyundai said in May that it’s building a battery plant in Georgia. Ford said last year it would invest $11.4 billion with LG Energy Solution rival SK Innovations to built two manufacturing campuses for electric vehicles. Mercedes-Benz opened a battery plant in Alabama earlier this year. Stellantis, which consists of Fiat Chrysler and French automaker PSA group, announced last year with LG Energy Solution that it would build a battery factory that produces 40 gigawatt hours, the same capacity Honda envisions.
LG is also a longtime partner of General Motors, with which it has projects in the works in Ohio and Tennessee that are expected to cost $2.3 billion each. LG also supplied the battery for the Chevrolet Bolt, which led to a costly recall in which LG paid GM about $1.9 billion
Rob McLean, Chris Isidore and Peter Valdes-Dapena contributed to this report.
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