Honda And LG Team Up To Fix Electric Cars’ Biggest Issue In The US

In a press release, Honda announced it’s teaming up with LG Energy Solution to invest $4.4 billion in lithium-ion battery production plant in the U.S. Once the plant is up and running, it’s expected to produce 40GWh of battery capacity annually to meet the demand of its upcoming EV models like the Honda Prologue and Acura Precision.

“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,” Toshihiro Mibe, the CEO and President of Honda said in the press release. 

Since Honda EVs will be sourcing lithium batteries that will be produced in the U.S., its electric cars could be eligible for a tax credit of up to $7,500 under the Inflation Reduction Act. This will give Honda a competitive advantage since most EV manufacturers that produce their batteries overseas are not eligible for that tax rebate.

Honda is yet to disclose the location of this proposed plant with LG, but Nikkei Asia reported that it might be in Ohio. Honda already has an established manufacturing facility in Ohio, and an EV battery production plant close to it would be convenient. Nikkei Asia also reports that Honda will have a 49% in the joint venture, while LG Energy Solution will control 51%.

The construction of the Honda-LG battery production plant is scheduled to start in early 2023, and is expected to wrap up by 2025.