Honda Motor Co. and South Korean battery maker LG Energy Solution said they will invest $4.4 billion to build lithium ion batteries in the U.S. for Honda and Acura brand electric vehicles. The cooperation will establish a joint venture battery plant with annual capacity for about 40 GWh of pouch-type lithium ion batteries. This is the same capacity like VW is build up in Salzgitter.
Construction is slated to start in early 2023 with mass production beginning by the end of 2025.
The ramp up comes as Honda plans to build about 800,000 electric vehicles (EV) in North America by 2030. By that time, EV production should account for 40 to 50 percent of the company’s total output in North America.
Remark: North American production of batteries is especially critical to comply with the requirements set forth for EV incentives in the recently enacted Inflation Reduction Act. EVs qualifying for up to $7,500 in tax credits must source their battery materials from countries the U.S. has a free trade agreement with, and a certain percentage of the battery must be made in North America.
Honda‘s power pack push is part of the automaker’s roadmap to invest 5 trillion yen ($36.35 billion) over the next 10 years in electrification and software as it rolls out 30 full-electric vehicles globally and builds production capacity for 2 million EVs annually by 2030.
From 2024, American Honda targets annual sales of 70,000 for its upcoming Honda Prologue crossover that it will launch on a platform developed by General Motors. This month, the Acura brand teased its first EV with the Precision EV Concept, saying it will be called the ZDX. The ZDX, likewise built through the GM partnership, is also expected in 2024.
Honda will introduce its own EVs for the 2026 model year and start making them in North America.
LG Energy Solution, which aims to go carbon neutral by 2050, has battery partnerships with several automakers, including General Motors, Stellantis and Hyundai Motor Group.
