Aug. 29 (UPI) — Honda Motor Co. announced Monday a $4.4 billion joint venture with South Korean battery manufacturer LG Energy Solution to produce lithium-ion batteries in the United States to power electric vehicles.
A location for the new battery manufacturing plant hasn’t been determined, but construction is expected to begin early next year with mass production underway by the end of 2025, the companies said in a news release.
The plant will supply batteries exclusively to Honda facilities in North America.
The Japanese automaker produces the Accord sedan and midsize CR-V vehicles at its longstanding Maryville, Ohio, plant but doesn’t offer an electric vehicle in the United States yet.
In April, the company announced a partnership with General Motors to produce electric vehicles. The companies are expected to launch the Honda Prologue in 2024.
“Honda is working toward our target to realize carbon neutrality for all products and corporate activities the company is involved in by 2050,” President and CEO Toshihiro Mibe said in a news release.
“Aligned with our longstanding commitment to building products close to the customer, Honda is committed to the local procurement of EV batteries, which is a critical component of EVs,” Mibe said.
The new plant also may help the companies take advantage of electric vehicle tax credits provided by the Inflation Reduction Act. New guidelines under the act require electric batteries to be manufactured in North America to qualify for EV tax credits.
In July, the U.S. Department of Energy said it would provide GM and LG Energy a $2.5 billion loan for the joint venture Ultium Cells LLC to build lithium-ion battery plants in Ohio, Tennessee and Michigan.
“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,” LG Energy Solution CEO Youngsoo Kwon said in a news release.