Honda & LG Energy Solutions Making A $4.4 Billion Battery Facility In Ohio
Honda is fast-tracking its plans to go fully electric and as a part of the acceleration, it has announced a new $4.4 billion JV with LG Energy Solutions for a battery facility in Ohio. The two companies had announced the plan earlier, but the location had not been finalised, but it seems like Ohio has won out.
The project will create 2,200 jobs and the overall cost will be $4.4 billion. Honda will also invest $700 million separately to retool the Ohio plant and add three hundred jobs as it seeks to have electric vehicle production in place. Honda will produce battery cases in Anna, Ohio and the engine plant will be combined with battery modules from the JV. Finally, the batteries that are produced by the JV will be installed in EVs at two other locations in Ohio.
In August, the US Congress approved billions of dollars in tax incentives and grants for automakers to encourage increased production of EVs and batteries in the United States. It also approved new consumer tax credits to incentivize North American battery and EV production.
US president Joe Biden recently said that companies were “committing more than $5 billion toward electric vehicle battery manufacturing and factory retooling across the state”. It is clear he was hinting at Honda as the entire investment is more than $5 billion. Biden wants 50 per cent of all new vehicles produced in the US to be EVs.
The plan is to start the construction of the new facility by 2023 and complete it by the end of 2024. The plant aims at 40GWh of annual capacity and mass production of lithium-ion batteries is to start by the end of 2025.
Honda aims to have a fully electric vehicle portfolio by 2040. It has a partnership with GM to use the Ultium platform which is going on new EVs like the Prologue. Jointly, GM and Honda wish to overtake Tesla in sales of EVs by 2027. In states like California, automakers are under even more pressure as the mandate is to stop selling petrol-based vehicles by 2025.
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