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Honda and LG invest $4.4b in US battery plant

IN DEMAND: Honda plans to build around 800,000 EVs in North America by 2030 meaning its pouch-type lithium-ion batteries will be in very high demand. Pictured is the forthcoming Acura ZDX electric SUV.

Joint venture expected to provide annual capacity of 40GWh from 2025

30 Aug 2022

HONDA and South Korean battery maker LG Energy Solutions (LGES) have committed to a combined investment of $US4.4 billion ($A6.35b) that will see the pair manufacture pouch type lithium-ion batteries for Honda and Acura brand electric vehicles in the United States.


The plant aims to have an annual production capacity of approximately 40GWh with all batteries to be supplied exclusively to Honda in North America. The location of the facility has not yet been finalised.


Honda says the two companies aim to begin construction of the facility early next year and will have production of advanced lithium-ion battery cells ready for the end of 2025.


The manufacturers say that expanding local EV production and ensuring the timely supply of batteries would put it in the best position to target the rapidly growing North American market.


“Our joint venture with Honda, which has significant brand reputation, is yet another milestone in our mid- to long-term strategy of promoting electrification in the fast-growing North American market,” said LGES CEO Youngsoo Kwon.


“Since our ultimate goal is to earn our valued customers’ trust and respect, we aspire to position ourselves as a leading battery innovator, working with Honda in achieving its core initiative for electrification, as well as providing sustainable energy solutions to discerning end customers.”


LGES, which aims to be carbon neutral by the middle of the century, has existing battery partnerships with several car-makers including GM, Hyundai and Stellantis. The company said previously that it is considering a fourth US site in Indiana where it will manufacture battery cells for GM’s Ultium platform cars.


Honda said previously that it plans to build approximately 800,000 electric vehicles in North America by the end of the decade.


By that time, EV production is estimated to account for between 40 and 50 per cent of the company’s total output in North America, underscoring Honda’s need for a substantial increase in battery supply.


As reported by Automotive News this week, the production of EV batteries in North America is critical to complying with the requirement set forth for electric vehicle incentives in the recently enacted Inflation Reduction Act.


EVs qualifying for up to $US7500 ($A10,900) in tax credits must source their battery materials from countries the US has a free trade agreement with, and a certain percentage of the battery must be made in North America.


Honda has stated previously that it plans to invest $US36.4 billion ($A52.6b) in electrification and software over the coming decade. It plans to roll out 30 battery electric vehicles globally and build production capacity for two million EVs annually by 2030.


“Honda is working toward our target to realise carbon neutrality for all products and corporate activities the company is involved in by 2050,” said Honda Motor Company president, CEO and representative director Toshihiro Mibe.


“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 LGES, the leading global battery manufacturer, will be part of such a Honda approach,” he said.


Earlier this month, Honda teased its first American EV with the Precision EV Concept (pictured), saying the model will be sold as the Acura ZDX in production form.


Built in partnership with General Motors, but based on Honda’s e:Architecture platform, the model is expected to be launched in 2024 and will utilise GM-sourced Ultium batteries.


“The Acura ZDX represents the start to what will be an accelerated path toward electrification by the end of the decade and the key role the Acura brand will play in our company’s global goal to achieve carbon neutrality in 2050,” said Acura national sales assistant vice president Emile Korkor.


“Acura will remain focused on performance in the electrified era and Type S will continue to represent the pinnacle of this direction.”

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