Honda and LG target rapidly-growing North American EV market; new US $4.4 billion (Rs 35,173 crore) plant will have production capacity of 40GWh per annum.
Honda Motor Co and LG Energy Solution have announced an agreement to establish a joint venture (JV) company to produce lithium-ion batteries in the U.S. to power Honda and Acura EV models for the North American market.
The two companies will invest a total of US $4.4 billion (Rs 35,173 crore) and establish a new JV plant in the U.S. The plant aims to have an annual production capacity of approximately 40GWh.
Honda and LGES are banking on the premise that expanding local electric vehicle production and ensuring the timely supply of batteries would put them in the best position to target the rapidly-growing North American EV market.
The pouch-type batteries produced at the new JV plant will be supplied exclusively to Honda facilities in North America. While the location for the joint venture plant is yet to be finalized, based on Honda’s plans for EV production in North America, the two companies aim to begin construction in early 2023, in order to enable the start of mass production of advanced lithium-ion battery cells by the end of 2025.
"Our joint venture with Honda, which has significant brand reputation, is yet another milestone in our mid- to long-term strategy of promoting electrification in the fast-growing North American market," said Youngsoo Kwon, CEO of LG Energy Solution. “Since our ultimate goal is to earn our valued customers’ trust and respect, we aspire to position ourselves as a leading battery innovator, working with Honda in achieving its core initiatives for electrification, as well as providing sustainable energy solutions to discerning end consumers.”
“Honda is working toward our target to realize carbon neutrality for all products and corporate activities the company is involved in by 2050,” said Toshihiro Mibe, President, CEO and Representative Director of Honda Motor Co.
He added, “Aligned with our longstanding commitment to build products close to the customer, Honda is committed to the local procurement of EV batteries which is a critical component of EVs. This initiative in the U.S. with LGES, the leading global battery manufacturer, will be part of such a Honda approach.”
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