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Honda Motor and LG Energy plan to build $4.4 billion battery factory for electric vehicles

Honda Motor and LG Energy plan to build $4.4 billion battery factory for electric vehicles
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TOKYO/WASHINGTON, Aug 29 (Reuters) – Japan’s Honda Motor Co (7267.T) will partner with Korean battery supplier LG Energy Solution Ltd. in the United States (373220.KS)the two companies announced on Monday.

Battery makers are looking to ramp up production in the US, where a shift toward electric vehicles (EV) could increase as the country introduces stricter regulations and tightens eligibility for tax credits.

The plant’s location has not yet been finalized, the companies said, but two people briefed on the matter confirmed reports that Honda is seriously considering Ohio, where Honda’s main US factory is located.

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The companies are targeting an annual production capacity of about 40 GWh with the batteries, which will be shipped exclusively to Honda plants in North America to power Honda and Acura EV models.

The two are expected to form a joint venture before the plant is built, with construction slated to begin in early 2023 and mass production in late 2025.

Ohio Gov. Mike DeWine said his administration is working with Honda and LG “to make sure they choose Ohio for this new electric battery plant.” The sources on the matter said an announcement about the location could come in weeks.

The US government has been pushing policies aimed at bringing more batteries and electric vehicle manufacturing into the country.

President Joe Biden signed a $430 billion climate, health and tax bill this month that would make electric vehicles built outside of North America ineligible for tax credits. Continue reading

Honda Motor logo is pictured at the 43rd Bangkok International Motor Show in Bangkok, Thailand, March 22, 2022. REUTERS/Athit Perawongmetha

White House Deputy National Climate Advisor Ali Zaidi hailed Honda LG’s “massive investment” which he says has been catalyzed by climate and infrastructure legislation.

US Energy Secretary Jennifer Granholm said the government is “bringing back domestic battery manufacturing to provide Americans with high-paying jobs that will fuel the EV revolution.”

California last week announced a plan that would require all new vehicles sold in the state to be either electric or plug-in electric hybrids by 2035. Continue reading

The two companies said that a combination of strong local EV manufacturing and timely battery delivery would put them “in the best position to address the rapidly growing North American EV market.”

LG Energy Solution, which is mainly engaged in the development of next-generation lithium-ion battery materials and batteries, also supplies batteries for electric vehicles and has signed joint venture agreements with General Motors (GM.N)Hyundai Motor Co (005380.KS) and Stellantis (STLA.MI). Continue reading

In July, Panasonic Energy Co, a unit of technology conglomerate Panasonic Holdings Corp (6752.T) and a large Tesla Inc (TSLA.O) Supplier said he has chosen Kansas as the location for a new battery plant with an investment of up to $4 billion. Continue reading

Earlier this year, Honda set a goal of launching 30 EV models worldwide by 2030 and producing about 2 million electric vehicles per year. Continue reading

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Reporting by Satoshi Sugiyama and Heekyong Yang in Seoul and David Shepardson in Washington; Edited by Rashmi Aich Krishna Chandra Eluri, Kirsten Donovan and Chris Reese

Our standards: The Thomson Reuters Trust Principles.

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