Tokyo — LG, a major South Korean battery manufacturer, and Honda, a Japanese automaker, said on Monday that they will invest $4.4 billion in a joint venture in the United States to create batteries for Honda electric vehicles in the North American market.
They stated that the location of the factory has not yet been determined, but that building will begin in early 2023 and mass production of sophisticated lithium-ion battery cells will commence by the end of 2025.
The formation of the joint venture is scheduled for this year, pending regulatory permission.
Youngsoo Kwon, chief executive officer of LG Energy Solution, stated, “Our joint venture with Honda, a company with a substantial brand reputation, is another another milestone in our mid- to long-term plan of boosting electrification in the rapidly expanding North American market.”
According to a joint statement, the plant would make batteries exclusively for Honda automobiles assembled in North America, including the company’s Acura premium brand.
LG, a prominent manufacturer of lithium-ion batteries for electric vehicles and power systems, already produces them in joint ventures with General Motors, Ford Motor Company, and Hyundai Motor Group of South Korea. The corporation is based in Seoul, South Korea, but has operations in the United States, China, and Australia, among others.
Concerns about climate change and pollution, as well as rising petrol prices, are anticipated to increase demand for electric vehicles in the U.S. and many other countries. All of the world’s leading automakers are expanding their EV offerings.
“Honda is moving toward its goal of achieving carbon neutrality for all products and corporate activities by 2050,” stated Honda’s chief executive, Toshihiro Mibe.
A new U.S. law provides a tax credit of up to $7,500 that can be applied toward the purchase of an electric vehicle. To be eligible for the full credit, though, the battery must include at least 40 percent of metals mined or recycled within North America.