Honda, LG Energy to set up $4.4 billion EV battery venture in U.S.

Honda Motor Co. and LG Energy Solution Ltd. said Monday they will set up a joint venture in the United States to produce batteries for electric vehicles with a total investment of $4.4 billion.

The Japanese and South Korean companies plan to begin construction of the battery plant early next year and mass production by the end of 2025, they said in a press release.

All the lithium-ion batteries produced at the plant will be used to power EVs sold under Honda and Acura brands in North America, they said. The exact location of the plant has not been finalized yet.

The move comes as Honda accelerates its EV push amid increasingly strict regulations on gasoline-powered vehicles worldwide.

As the shift away from fossil fuels to reduce carbon emissions becomes a global trend, Honda has vowed to stop selling new gasoline-powered vehicles by 2040. The automaker in March also agreed with Sony Group Corp. to set up a joint venture to produce next-generation EVs.

The new plant is expected to offer stable supply of batteries to Honda in the North American market, where demand for EVs is set to rise sharply.

The state of California plans to ban sales of gasoline-powered vehicles including hybrid cars by 2035, a move that could spread to the rest of the United States and prompt an EV development race among automakers.

“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,” Honda President Toshihiro Mibe said in the press release.

SOURCE: NEWS AGENCIES