Honda Japan Partners with LG Energy Solution to Build Electric Vehicle Battery Factory in the US

Honda's CEO Toshihiro Mibe is answering reporters' questions.
[Image source=AP Yonhap News]

[Asia Economy Reporter Lee Ji-eun] Japanese automobile manufacturer Honda and LG Energy Solution plan to establish a joint venture and build a vehicle battery factory in the United States, according to a report by Japan's Nihon Keizai Shimbun on the 29th. This is the first time Honda is building its own electric vehicle battery factory, with construction expected to begin next year and mass production starting in 2025.

According to the report, Honda will establish a joint venture with LG Energy Solution in Ohio, USA, where Honda's main factory is located, to produce lithium-ion batteries.

Currently, LG Energy Solution is also increasing production capacity by establishing joint factories in North America with General Motors (GM) in the United States. LG Energy Solution estimates the annual production capacity of joint factories with GM and others to be 30 gigawatt-hours (GWh), capable of producing 500,000 to 600,000 electric vehicles. The factory to be established jointly with Honda is reported to be of a similar scale.

Nihon Keizai Shimbun reported that in 2026, Honda is expected to equip electric vehicles made with its independently developed chassis with the 'Ultium' electric vehicle batteries produced through the joint venture with LG Energy Solution. Honda plans to produce about 800,000 electric vehicles in the United States by 2030 and aims to release all new cars as electric or fuel cell vehicles by 2040.

Nihon Keizai Shimbun analyzed that "the joint venture between the two companies largely aims to avoid supply chain disruption risks intensified by US-China conflicts." Until now, automakers have used the strategy of sourcing electric vehicle batteries from the same locations where electric vehicles are produced to reduce production costs. However, as the US moves to restrict electric vehicle production domestically, they are seeking plans with Korean companies to reduce supply chain risks.

It also reported that as US-China tensions deepen, there is a growing view among some automakers that expanding electric vehicle sourcing within China is risky.

Meanwhile, Nihon Keizai Shimbun forecasts that once the factory begins construction in 2025, the three Korean electric vehicle battery companies?SK On, Samsung SDI, and LG Energy Solution?will operate a total of 12 electric vehicle battery factories in North America.

This content was produced with the assistance of AI translation services.