Honda and LG Energy will jointly build an electric car battery factory in the United States. The two companies announced this on Tuesday. The factory should eventually have an annual production capacity of 40GWh.
Honda and LG will start construction of the factory early next year, the two companies write in a statement. Mass production at the factory is to start before the end of 2025. The factory-produced batteries are supplied exclusively to Honda plants in the United States. The batteries are therefore used exclusively in electric Honda and Acura cars. The factory is expected to have an annual production capacity of 40GWh. The companies do not say how many cars can be supplied with batteries each year.
The factory will cost $4.4 billion, according to Honda and LG. Honda and LG Energy will form a joint venture before starting construction on the plant next year. According to the Financial Times LG will own 51 percent of the joint venture; Honda gets the other 49 percent. It is not yet known where the production location will be located, but Japanese daily Nikkei writes that the two companies are considering Ohio. Honda’s largest American factory is also located in that city.
Although the two companies are not officially addressing this, it is likely that the two companies will request support for the construction of the plant. The Inflation Reduction Act that US President Biden recently signed, releases a total of 40 billion dollars in tax breaks for the construction of, among other things, EV batteries for the American market.