Honda and LG Energy Solution are forming a joint venture to produce EV batteries in the US.
Honda Motor Co., Ltd. (NYSE:HMC) and LG Energy Solution (LGES; KRX: 373220) have established a joint venture (JV) business that would manufacture lithium-ion batteries in the United States for use in Honda and Acura EV vehicles for the North American market.
With this arrangement, LGES and Honda will make a combined $4.4 billion in investments and open a new joint venture facility in the United States. The project intends to have a production capacity of about 40GWh per year.
The new JV operation will provide its pouch-type batteries solely to Honda locations in North America.
The two businesses hope to start building the joint venture factory in early 2023 in order to commence mass production of advanced lithium-ion battery cells by the end of 2025, while the exact site has not yet been determined based on Honda's ambitions for EV manufacturing in North America.
LGES and Honda decided to open the joint venture battery plant in the United States because they both thought that increasing local production of electric vehicles and ensuring a timely supply of batteries would put them in the best possible position to compete in the quickly expanding North American EV market.
CEO of LG Energy Solution Youngsoo Kwon stated:
“Our joint venture with Honda, a highly-reputed brand, marks another key turning point in our long-term plan to encourage electrification in the rapidly expanding North American market.”
"Since our ultimate objective is to win the confidence and respect of our valued customers, we hope to position ourselves as a leading battery pioneer, collaborating with Honda to achieve its fundamental ambitions for electrification, as well as offering sustainable energy solutions to selective end users."
Honda Motor Co., Ltd.'s Toshihiro Mibe, President, CEO, and Representative Director, said:
“Honda is making progress towards its goal of becoming carbon neutral for all of its products and business operations by the year 2050.”
"In keeping with our long-standing commitment to produce products near to the consumer, Honda is dedicated to sourcing EV batteries locally, as they are a crucial part of EVs. This project in the US with LGES, the top battery producer globally, will be a component of such a Honda strategy.”
Initiation of the joint venture is planned for 2022. Typical closing requirements, such as obtaining regulatory permissions, are applied to the closure.
About LG Energy Solution
A prominent global maker of lithium-ion batteries for electric cars, mobility, IT, and energy storage systems, LG Energy Solution (KRX: 373220), a split-off from LG Chem, is based in South Korea.
The firm has over 25,000 battery-related patents and has 30 years of expertise in ground-breaking battery technology and substantial research and development (R&D).
Its extensive global network comprises battery production facilities that were developed through joint ventures with significant automakers including General Motors, Stellantis N.V., and Hyundai Motor Group. This network encompasses North America, Europe, Asia, and Australia.
LG Energy Solution, a leader in sustainable business practices, wants to achieve carbon-neutral operations by the year 2050. The company also supports a diverse and inclusive corporate culture and upholds the principle of shared growth.
About Honda Motor Co., Ltd.
Worldwide development, production, and sales of vehicles, motorcycles, power items, and aviation equipment are handled by Honda Motor Co., Ltd. (NYSE: HMC). Through its three product lines, Honda now produces more than 30 million goods yearly.
With more than 60 production facilities spread across 27 nations, Honda and its partners employ around 220,000 people worldwide to manufacture products. Honda aims to achieve carbon neutrality for all of its goods and business operations globally by the year 2050, as well as to have no fatal traffic accidents involving Honda cars or motorbikes.