LG Energy Solution to Establish Electric Vehicle Battery Plant in the US with Honda... 5 Trillion KRW Investment

Joint Venture Establishment Contract Signing Ceremony Held on the 29th
Securing Production Capacity of 40GWh
First Joint Venture Between 'Korean Battery - Japanese Automaker'

[Asia Economy Reporter Choi Seoyoon] LG Energy Solution is building a battery joint venture factory in the United States with the Japanese automaker Honda Motor.

On the 29th, the two companies held a signing ceremony for the establishment of the battery joint venture corporation at LG Energy Solution’s headquarters in Yeouido Park One, Seoul, attended by LG Energy Solution Vice Chairman and CEO Kwon Young-soo and Honda CEO Toshihiro Mibe, among others. They agreed to invest a total of 5.1 trillion won (4.4 billion dollars) to establish a battery production capacity of 40GWh in the U.S.

The factory site is under review. Construction is planned to begin in the first half of next year, with mass production of pouch battery cells and modules starting from the end of 2025. The batteries produced will be supplied to Honda and Honda’s premium brand Acura electric vehicle models.

CEO Toshihiro Mibe said, “Honda will achieve carbon neutrality in all products and corporate activities by 2050,” adding, “With the belief in producing products close to customers, we have established an electric vehicle battery production base with LG Energy Solution, a global leader in batteries.”

Vice Chairman Kwon Young-soo emphasized, “This joint venture with Honda, which has built a high brand trust, will be an opportunity to further strengthen our dominance in the North American electric vehicle market,” and added, “Through close cooperation with customers, we will lead electrification and become the world’s best battery company trusted and loved by customers.”

This joint venture establishment marks the first strategic cooperation case between a Korean battery company and a Japanese automaker.

The two companies recently judged that expanding local electric vehicle production and timely supply of batteries are most important to target the rapidly growing North American electric vehicle market, and decided to jointly build a battery factory, a core component of electric vehicles, in the U.S.

An LG Energy Solution official said, “This joint venture establishment is even more meaningful as it is the first time LG Energy Solution supplies batteries to a technology-focused Japanese automaker, recognizing our customer value innovation capabilities such as quality and technology,” adding, “Through this, we will further strengthen our customer portfolio and dominance in the North American market, securing leadership in future competition as well as improving profitability.”

The U.S. electric vehicle market is considered the fastest-growing market worldwide. According to market research firm SNE Research, the U.S. electric vehicle battery market is expected to grow sharply from 64GWh in 2021 to 143GWh in 2023 and 453GWh in 2025, with an average annual growth rate of 63%.

Accordingly, LG Energy Solution is expanding its North American battery production capacity with an investment exceeding 20 trillion won. It is currently constructing three joint venture factories with GM and one with Stellantis, expanding a standalone factory in Michigan, and is also closely reviewing the construction of a cylindrical battery factory in Arizona. Adding the joint venture factory with Honda further strengthens its dominance in the North American market.

Honda holds the 6th largest market share in the North American automobile market and has built high brand trust. It is aggressively pursuing an electrification strategy, investing a total of 48 trillion won to sell 2 million electric vehicles globally by 2030.

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