Honda Motor Company, LG Energy Solution Announce Planned U.S. EV Plant
On Aug. 29, American Honda Motor Company and South Korean battery maker LG Energy Solution Ltd. announced that they have gotten together on a plan to build a factory to produce lithium-ion batteries for Honda and Acura electric vehicles. The factory is projected to cost $4.4 billion. Construction is slated to begin early next year, and the plant is projected to start producing batteries by the end of 2025, with a proposed manufacturing goal of 700,000 batteries producing a total output capacity of 40 gigawatt-hours annually. Whatever state is chosen for the plant’s location, Honda Motors officials assert that the plant will benefit Honda plants throughout the country.
EV Honda Products
Honda has recently been behind some of its competitors in producing electric vehicles, although it offers hybrid CR-Vs and Accords. The company plans to unveil a fully electric SUV named Prologue, in development with General Motors, in the near future. Batteries produced at the new plant would be used in Honda and Acura EV offerings. This factory is part of a plan to achieve carbon neutrality for Honda with a goal set for 2050. Honda had already announced a target of 30 EV models worldwide with a production goal of two million Evs annually by 2030.
New Ohio Honda Plant
Plans for the plant’s location have not been finalized, but one of the considered sites is Ohio, which already hosts Honda’s main U.S. factory. Ohio Gov. Mike DeWine said in a statement that Ohio is working with Honda and LG on the matter. He expressed hope that the factory would be located in his state. Honda Motor Co. currently employs 15,000 people in the state including an Anna engine plant, an assembly plant in Marysville, and a new Transportation Research Center outside Marysville containing one of the most advanced wind tunnels in the world.
GM Working with LG Too
This follows an announcement last month by the U.S. Department of Energy that a conditional loan of $2.5 billion has been approved for General Motors to also pair with LG Energy Solution in aiding their joint venture, Ultium Cells, to build three lithium-ion battery factories in the U.S. The plants will support GM’s goal of producing a million Evs annually by 2025. These factories are planned for Michigan, Tennessee and Ohio. Ford Motor Co. has teamed with SK Innovation to also produce batteries in Kentucky. Other companies, including Toyota, Volkswagen and Stellantis also plan battery plants in the U.S.
New Green Energy Bill
Besides being needed because of the growing popularity of electric vehicles, a recent law was passed and signed offering a tax credit of up to $7,500 with the purchase of an electric vehicle. However, to qualify, the vehicle must be assembled in the U.S. and include a battery built in North America with at least 40% of the metals used either mined or recycled on the continent. The new Honda battery plant would ensure a timely battery supply for the North American EV market, which is rapidly growing.
Honda Motor Co. stock started trading higher with the announcement of this planned factory. Bank of America has reportedly issued a Buy rating for the stock. With the growth in popularity of electric vehicles, this future plant can only be a boon to the company’s value.
Honda, LG team up to build $4.4 billion EV battery plant in the U.S.