Arrow-right Camera
The Spokesman-Review Newspaper

The Spokesman-Review Newspaper The Spokesman-Review

Spokane, Washington  Est. May 19, 1883
Fog 29° Fog
News >  Business

Honda, LG set to build $4.4 billion EV battery plant in U.S.

Aug. 29, 2022 Updated Mon., Aug. 29, 2022 at 9:49 a.m.

A production associate adjusts his hat at the Honda of America Manufacturing Marysville Auto Plant in Marysville, Ohio on Dec. 21, 2017.   (Ty Wright/Bloomberg )
A production associate adjusts his hat at the Honda of America Manufacturing Marysville Auto Plant in Marysville, Ohio on Dec. 21, 2017.  (Ty Wright/Bloomberg )
By Heejin Kim Bloomberg

Honda Motor and South Korean battery maker LG Energy Solution will spend $4.4 billion to build a new battery plant in the U.S. as the Japanese carmaker seeks to phase out fossil-fuel vehicles completely by 2040.

The facility will have an annual capacity of about 40 gigawatt-hours with mass production slated to start at the end of 2025, Honda said Monday in a company filing.

The duo will set up a joint venture this year in which Honda will hold 49% stake by investing $1.7 billion. Construction is expected to start by early 2023.

The location of the plant is not decided. Bloomberg reported in June that Ohio is a front-runner, and the Japanese firm already has carmaking plants there.

Carmakers around the world are scrambling to build electric car or EV battery plants in North America by partnering with Asian battery makers.

Panasonic Holdings, which supplies electric car batteries to Tesla, is in talks to invest $4 billion in a battery plant in the US, the Wall Street Journal reported last week.

Korean battery makers also have a slew of plans for battery plants in the U.S., constructing four for General Motors, two for Stellantis and three for Ford Motor.

Honda meanwhile plans to spend 5 trillion yen ($36 billion) on its push into EVs over the next decade by launching some 30 new models, one of the most aggressive expansions of electrification in Japan.

The new plant will produce pouch-type cells for Honda and Acura’s EVs.

“Honda is working toward our target to realize carbon neutrality for all products and corporate activities the company is involved in by 2050,” Honda CEO Toshihiro Mibe, said in Monday’s statement.

“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. This initiative in the US with LG Energy, the leading global battery manufacturer, will be part of such a Honda approach.”

Automakers outside of the US are also facing a new local law on energy and tax policy called the Inflation Reduction Act, which requires them to assemble EVs in the US and reduce dependence on China when it comes to the use of minerals in batteries in order to secure a maximum $7,500-a-car subsidy.

With the exception of Nissan’s Leaf, no other Japanese EV model would qualify for subsidies under the new rules.

South Korea’s trade minister Lee Chang-yang said Monday he will seek cooperation with Japan and European nations to ease requirements on EV and battery makers.

The Spokesman-Review Newspaper

Local journalism is essential.

Give directly to The Spokesman-Review's Northwest Passages community forums series -- which helps to offset the costs of several reporter and editor positions at the newspaper -- by using the easy options below. Gifts processed in this system are not tax deductible, but are predominately used to help meet the local financial requirements needed to receive national matching-grant funds.

Active Person

Subscribe now to get breaking news alerts in your email inbox

Get breaking news delivered to your inbox as it happens.