Electric vehicles (EVs) are rapidly becoming popular across the country. And, this climbing popularity comes with a push from automakers to increase investments in American EV battery production. Honda and LG Energy Solutions, a battery manufacturer headquartered in South Korea, are the latest companies to make such a move through a recent announcement of an investment commitment in American manufacturing.
The two companies recently announced a $4.4 billion investment to build a new EV battery production plant here in the United States. The plant will manufacture advanced lithium-ion battery cells. The joint venture is expected to be fully established this year, with the plant coming online in 2025.
Youngsoo Kwon, CEO of LG Energy Solution, commented:
“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. 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.”
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Approval of this joint venture is contingent on getting the green light from American regulators. Recently the two companies announced that they will break ground on a facility in Fayette County, Ohio in 2023.
“Honda is working toward our target to realize carbon neutrality for all products and corporate activities the company is involved in by 2050,” added Toshihiro Mibe, Honda’s president and CEO. “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.”
Honda currently has manufacturing facilities in Alabama, Indiana, and Ohio. This new manufacturing plant aims to annually produce 40-gigawatt hours worth of batteries. Filing documents noted that Honda will hold a 49 percent stake in the venture with an investment of $1.7 billion while LG Energy Solution will have a 51 percent stake.
The Japan-based auto manufacturer announced EV production targets earlier this year. Honda plans to invest just under $40 billion in software and electrification technologies over the next decade. The company also aims on launching 30 EV models worldwide by 2030, with a goal of producing more than 2 million EV units annually. Here in the United States, the manufacturing goal is 800,000 annual units.
This move is the latest in a wave of investments from automakers to build locally. The EV revolution has arrived in America and, with buy-in from the private sector, it is here to stay.
Kelvey Vander Hart is a native Iowan, a member of the American Conservation Coalition, and a communications specialist at Reason Foundation.