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Honda to build JV U.S. battery plant, retool Ohio plants

Stock Markets Oct 11, 2022 02:31PM ET
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2/2 © Reuters. FILE PHOTO: The Honda Motor logo is pictured at the 43rd Bangkok International Motor Show, in Bangkok, Thailand, March 22, 2022. REUTERS/Athit Perawongmetha 2/2
 
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By David Shepardson

WASHINGTON (Reuters) -Honda Motor Co Ltd and LG Energy Solution on Tuesday announced Ohio as the site of their planned $4.4 billion joint-venture battery plant.

The two companies had announced the plan in August but had not settled on a U.S. location. They said on Tuesday they are initially committing to investing $3.5 billion and creating 2,200 jobs but said the overall investment is projected to reach $4.4 billion.

Honda will separately invest $700 million to retool three Ohio plants and add 300 new jobs, as it seeks higher electric- vehicle production.

Honda will produce battery cases at its Anna, Ohio, engine plant that will be combined with battery modules from the JV and then installed in EVs built at two other Ohio plants.

The plant is the latest in a string of battery plants announced as automakers race to shift gas-powered production to electric vehicles.

The U.S. Congress in August 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.

President Joe Biden praised the Honda-LG announcement, saying the companies were "committing more than $5 billion toward electric vehicle battery manufacturing and factory retooling across the state." Biden wants 50% of all new vehicles assembled by 2030 to be EVs or plug-in hybrids.

Honda plans to begin production and sales of EVs in North America in 2026, based on its new Honda e:Architecture.

The two companies plan to begin construction in early 2023 and aim to complete the new facility about 40 miles (64 km)southwest of Columbus, Ohio, by the end of 2024.

The plant aims to have approximately 40GWh of annual capacity as it starts mass production of lithium-ion batteries by the end of 2025.

EV batteries produced at the new JV plant will be provided to Honda auto plants to produce EVs to be sold in North America. Honda aims to make EVs and fuel cells represent 100% of its vehicle sales by 2040.

In April, Honda and General Motors Co (NYSE:GM) said they would develop a series of lower-priced electric vehicles based on a new joint platform, producing potentially millions of cars from 2027 in a bid to surpass Tesla (NASDAQ:TSLA) Inc in sales.

That announcement expanded on plans for GM to begin building two electric SUVs for Honda starting in 2024 - the Honda Prologue and an Acura model.

Automakers also face heightened requirements from California, the largest state auto market, which is mandating that carmakers stop selling gasoline-only vehicles by 2035 and have EVs represent at least 80% of their sales by then.

Honda to build JV U.S. battery plant, retool Ohio plants
 

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