Honda, LG to Establish U.S. Battery Plant

Tokyo, Aug. 29 (Jiji Press)--Japanese automaker Honda Motor Co. <7267> said Monday that it and South Korea's LG Energy Solution Ltd. will invest 4.4 billion dollars to jointly establish a lithium-ion battery plant in the United States. The joint venture with the South Korean battery giant will supply batteries for electric vehicles, as the U.S. market for such vehicles is expanding rapidly. Honda aims to accelerate U.S. production in order to clinch a bigger share of the country's auto market. Construction of the plant is set to begin early next year, with production expected to start in 2025. Honda will invest 1.7 billion dollars in the venture for a 49 pct stake. The automaker said that it will make the investment in stages from the current fiscal year. All batteries produced at the plant will be supplied to Honda's North American factories. The automaker's four-wheel vehicle sales in North America in fiscal 2021 stood at around 1.28 million units, over 30 pct of its global sales and more than double the roughly 540,000 units sold in Japan. Honda is also considering creating a new production line exclusively for electric vehicles in late 2025 or early 2026 as part of its plan to boost annual electric vehicle production in North America to about 800,000 units by 2030. The United States has revised its tax breaks for new car sales to a system that favors domestic production. Meanwhile, the state of California, which boasts a large market, has adopted a plan to ban sales of new gasoline-powered vehicles in 2035. Honda plans to release two new SUV electric vehicle models in 2024. Both are being developed jointly with General Motors Co. and will be equipped with the U.S. auto giant's batteries. END