Both companies aim to reach an annual production capacity of nearly 40GWh and supply batteries to Honda facilities in North America to facilitate the Honda and Acura EV models
South Korean battery manufacturing firm LG Energy Solution (LGES) and Japan’s Honda Motor have agreed to invest $4.4bn to establish a joint venture (JV) company to produce lithium-ion batteries for electric vehicles in the US.
The facility is expected to have an annual production capacity of nearly 40GWh. The location for the JV plant is yet to be decided.
The batteries are expected to be supplied to Honda facilities in North America to facilitate the Honda and Acura EV models.
Honda Motor president, CEO and representative director Toshihiro Mibe said: “Honda is working toward our target to realize carbon neutrality for all products and corporate activities the company is involved in by 2050.
“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 U.S. with LGES, the leading global battery manufacturer, will be part of such a Honda approach.”
The two companies intend to commence construction of the JV plant in early 2023. Further, the companies aim to start the mass production of advanced lithium-ion battery cells by the end of 2025.
Both companies expect to target the North American EV market by expanding local electric vehicle production and ensuring the timely supply of batteries through the establishment of the JV battery plant.
LG Energy Solution CEO Youngsoo Kwon said: “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.
“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 initiatives for electrification, as well as providing sustainable energy solutions to discerning end consumers.”
The joint venture is expected to begin in 2022.
Earlier in April 2022, LGES revealed its plans to invest nearly $5.54bn in global capital expenditures this year to maximise its battery manufacturing capacity.