Honda Joins Hands with LG Energy Solution on Establishing Lithium-Ion Battery Production Lines in the US

published: 2022-09-09 9:30 | editor: | category: News

As reported by Japanese media, Honda will be joining hands with South Korean battery supplier LG Energy Solution in investing several billions of US dollars on EV battery plants in the US. Construction is scheduled to begin in 2023, and mass production is set for 2025.

Honda, amidst the constantly expanding EV market in the US, is also looking to establish a stable battery supply chain in the country. Honda and LG Energy Solution will form a joint venture at Ohio, a strategic production location of the former, for the production of lithium-ion batteries. s

LG Energy Solution is the second largest manufacturer of lithium-ion batteries after CATL. Aside from working with Honda this time, the manufacturer is also partnering up with GM and Stellantis on the production of lithium-ion batteries in North America.

The lithium-ion battery plants co-established by LG Energy Solution and companies such as GM are capable of roughly 30GWh of annual capacity, which is similar to the plant that will be constructed with Honda, and will provide enough batteries for 500-600K units of EVs.

Honda aims to transform into a 100% EV or fuel cell manufacturer by 2040. As a result, the manufacturer plans to release an EV with independently developed chassis in 2026, and the adopted batteries are expected to come from the plant co-constructed alongside LG Energy Solution. Honda plans to produce roughly 800K units of EVs in the US by 2030, as well as a new production line exclusive to EVs.

The US is also a major market for Honda, and occupies more than 30% of the manufacturer’s global sales. California, largest auto market in the US, announced on August 25th the ban on sales of vehicles including HEVs starting from 2035, while the country has also proposed tax credits related to EVs, which would further stimulate the EV market.

Most auto manufacturers are aiming to lower their cost through close-proximity battery procurement. Honda acquired 1% of CATL’s shares in 2021 to guarantee its battery supply chain, and also planned to release 10 EVs adopted with the latter’s batteries in China during 2027. Honda expanded another battery chain in the US due to the country having its own EV production and supply chain, while the partnership with South Korea can lower the risk of supply chain scissions caused by the US-China conflict or other factors.

Honda is currently researching and developing the next generation battery, which is safer, smaller, and exerts longer driving range compared to the current mainstream liquid lithium-ion batteries. The manufacturer will invest JPY 43 billion in constructing a battery demonstration pilot line that will initiate operation starting from spring 2024, and aims to install the new batteries on vehicles that are released after the 2020s.

 (Cover photo source: Flickr/Mike Mozart CC BY 2.0)

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