Honda has announced plans for a U.S. manufacturing location as it partners with LG to produce batteries for EVs.
Key details
The Japanese car manufacturer is looking to move some of its operations to the U.S. Honda Motor Co. and South Korean company LG Energy Solution Ltd. plan to invest $4.4 billion as they construct a new battery plant.
Construction on the new facility is set to start in early 2023. The manufacturing facility will be fully operational by 2025 and will have a 40 gigawatt-hours annual capacity.
Honda will invest $1.7 billion, giving it a 49% stake in the plant. The new facility will be set up to produce batteries for the Honda and Acura electric vehicles (EVs).
No location for the plant has been officially announced, though it seems likely Ohio is a prime candidate. Honda already has manufacturing facilities in the state, Bloomberg reports.
Honda’s plans to go all eclectic are aggressive. The company has plans for 30 new models over the next decade, a $36 billion investment.
Why it’s news
Honda’s current plan is to phase out gas-powered vehicles from their line up by 2040. Honda and LG working together to phase out gas powered vehicles is part of a larger trend to push EVs.
California has plans to go all electric by 2035, a move that would likely push more states to do the same.
Europe and some parts of China have plans to phase out gas-powered vehicles by 2030.
European car companies Fiat, Chrysler Europe, and Bentley plan to phase out production of gasoline vehicles in line with Europe’s plans to go electric.
General Motors’ schedule has the company set to phase out the vehicles by 2035. Chrysler is on a more accelerated plan, aiming to retire the gas vehicles by 2028. Ford is currently planning on 40% electric vehicle sales by 2030, Fortune reports.
Backing up a bit
Honda isn’t the only automaker looking to set up shop in the U.S. The battery manufacturer for Tesla, Panasonic, is looking to invest around $4 billion in a plant in the U.S. Other Korean battery manufacturers are also looking to establish several battery plants for General Motors, Stellantis, and Ford, Bloomberg reports.
The newly signed Inflation Reduction Act may have something to do with that trend. The new law incentivizes EVs to be assembled in the U.S. through a tax credit and limits an auto manufacturer’s dependence on China.
