Honda builds JV US battery factory, retool Ohio Plants

Honda Motor Co Ltd and LG Energy Solution Tuesday announced Ohio as the site of their planned $4.4 billion joint venture battery plant.

The two companies had announced the plan in August, but had not yet established a US location. They said on Tuesday that they are initially committed to investing $3.5 billion and creating 2,200 jobs, but said the total investment is expected to reach $4.4 billion.

Honda will separately invest $700 million to remodel three Ohio plants and add 300 new jobs as it aims to increase production of electric vehicles.

Honda will manufacture battery cases at its Anna, Ohio, motorcycle plant that will be combined with battery modules from the JV and then installed in EVs built at two other Ohio plants.

The plant is the latest in a string of battery plants announced as automakers race to shift production from gas to electric vehicles.

The US Congress approved billions of dollars in tax breaks and subsidies for automakers in August to encourage the production of electric cars and batteries in the United States. It also approved new consumer tax credits to boost North American battery and EV production.

President Joe Biden praised the Honda-LG announcement, saying the companies pledged “more than $5 billion for electric vehicle battery production and factory upgrades statewide.” Biden wants 50% of all new vehicles assembled by 2030 to be electric or plug-in hybrids.

Honda plans to begin manufacturing and selling EVs in North America in 2026, based on the new Honda e: Architecture.

The two companies plan to begin construction in early 2023 and aim to complete the new facility approximately 40 miles (64 km) southwest of Columbus, Ohio by the end of 2024.

The plant aims to have approximately 40 GWh of annual capacity by the end of 2025 as the mass production of lithium-ion batteries begins.

EV batteries manufactured at the new JV plant will be supplied to Honda auto plants to produce EVs for sale in North America. Honda aims to have EVs and fuel cells represent 100% of car sales by 2040.

In April, Honda and General Motors Co. said they would develop a range of lower-cost electric vehicles based on a new joint platform, potentially producing millions of cars as of 2027 in a bid to surpass Tesla Inc in sales.

That announcement expanded plans for GM to begin building two electric SUVs for Honda from 2024: the Honda Prologue and an Acura model.

Automakers are also facing increased demands from California, the state’s largest auto market, which requires automakers to stop selling gasoline-only vehicles by 2035 and that electric vehicles must account for at least 80% of their sales by then.

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