Honda
Lithium-ion battery production in North America is set to increase in the next decade. The Biden administration and Congress have both enacted policies to boost domestic production over imports, and startups, battery companies and automakers are responding. Honda and LG Energy Solutions are the latest to take steps; On Monday morning, the companies announced that they will form a $4.4 billion joint venture to build a US battery factory.
“Our joint venture with Honda, which has a significant brand reputation, is another milestone in our mid- to long-term strategy to promote electrification in the fast-growing North American market,” said Youngsoo Kwon, CEO of LG Energy Solution. “As our ultimate goal is to earn the trust and respect of our valued customers, we strive to position ourselves as a leading battery innovator, partnering with Honda to deliver on its core electrification initiatives and sustainable energy solutions. offer to demanding end users.”
In May, the Department of Energy announced $3 billion in funding to boost domestic battery production. Much of that battery production will go to electric vehicles, especially since President Joe Biden signed the inflation cut bill this month. The law links an EV’s tax credit to where the battery pack is made – if an increasing proportion of the pack is non-domestic, there is no credit.
Even before the change in the tax credit for EVs, automakers rushed to set up battery factories in the US, mostly in southern states with no unions present. General Motors and LG are already building Ultium battery cells in Ohio, and Ford and SK are building plants in Tennessee and Kentucky that will complement the SK cells already made in Georgia.
Volkswagen is another customer for those Georgian SK cells for locally made ID.4 crossovers. But VW also wants to build cells in North America, possibly with multiple modular 40 GWh plants.
Stellantis, the owner of Ram and Jeep, among others, is another LG partner. It targets 2024 for the start of local cell production at a Windsor plant in Canada. But auto companies can be promiscuous — Stellantis is also partnering with Samsung SDI on an Indiana battery joint venture that should come online by 2025.
In 2025, Honda and LG will focus on mass production at this latest joint venture. It’s too early for them to finalize a site for this plant, but the companies say they plan to start construction early next year. The battery factory will produce pouch cells with an annual capacity of 40 GWh.
“Honda is working towards our goal of achieving carbon neutrality across all products and businesses it is involved in by 2050,” said Toshihiro Mibe, president and CEO of Honda Motor Company. “In line with our longstanding commitment to building products close to the customer, Honda is committed to the local sourcing of EV batteries, which is a critical part of EVs. This initiative in the US with LGES, the leading global battery manufacturer, will be part of such a Honda approach.”
Earlier this year, Honda announced it was partnering with GM on a new range of affordable EVs utilizing the latter’s new Ultium battery platform and flexible vehicle architecture. The first of these new Honda EVs is expected in 2027.
