Honda and LG Chem to build $4.4 billion EV battery plant in US

Honda and LG Chem will build a $4.4 billion electric vehicle battery plant in the United States, the latest move to bolster the country’s domestic production to comply with new tax credit rules.

Honda and LG Chem will form a joint venture to produce batteries in the United States for the automaker’s next line of electric vehicles. The two companies aim to begin construction in early 2023 to enable the start of mass production of lithium-ion battery cells by the end of 2025. Honda and its subsidiary Acura plan to launch 30 hybrid vehicles, battery-powered and fuel-cell powered. by 2030.

The plant, which aims to have an annual production capacity of around 40 GWh, is expected to be located in Ohio, according to The Wall Street Journal. The state is also the site of a future $2.3 billion battery factory that is being built by LG Chem and General Motors.

Locating battery production in the United States is important for automakers who want to take advantage of the $7,500 per-vehicle tax credit, which requires electric vehicles to be assembled in the United States. Foreign automakers have expressed concern that the new tax credits could discriminate against companies without manufacturing facilities in the United States.

The plant is one of a slew of new electric vehicle installations that are expected to come online in the coming years. Globally, battery production is expected to grow from 95.3 gigawatt hours (GWh) in 2020 to 410.5 GWh in 2024, according to GlobalData, a data and analytics firm.

Ford said its three new battery factories will enable production capacity of 129 GWh per year. General Motors plans four new battery plants in the US (also with LG Chem) for a total annual capacity of 140 GWh, while Volkswagen aims to have six battery cell production plants operating in Europe by 2030 to a total of 240 GWh per year. . And Stellantis is planning a new plant in Indiana, which will have an initial annual production capacity of 23 GWh.

Honda has teased two upcoming electric vehicles: the 2024 Honda Prologue and an Acura concept called Precision. The Prologue will be the first of two vehicles that Honda is co-developing with GM, using the American manufacturer’s Ultium batteries. GM and Honda have said they plan to produce “millions” of affordable electric vehicles starting in 2027.