Honda and LG Chem will construct a $4.4 billion EV battery manufacturing in the United States
Honda and LG Chem will establish a $4.4 billion electric car battery facility in the United States, the latest drive to boost domestic manufacturing in order to meet new tax credit requirements.
Honda and LG Chem will launch a joint venture to manufacture batteries in the United States for the automaker’s forthcoming EV portfolio. The two businesses want to start building in early 2023 so that mass manufacturing of lithium-ion battery cells may commence by the end of 2025. By 2030, Honda and its subsidiary Acura want to deliver 30 hybrid, battery-electric, and fuel-cell automobiles.
The facility, which is expected to have an annual production capacity of about 40GWh, will most likely be situated in Ohio. In addition, LG Chem and General Motors are constructing a $2.3 billion battery facility in the state.
Localizing battery manufacturing in the United States is critical for manufacturers seeking to qualify for the $7,500 per car tax credit, which requires EVs to be manufactured in the United States. Foreign automakers are concerned that the new tax credits would discriminate against firms that do not have manufacturing plants in the United States.
The facility is one of a slew of new EV facilities that are set to open in the coming years. According to GlobalData, a data and analytics organization, global battery manufacturing is predicted to rise from 95.3-gigawatt hours (GWh) in 2020 to 410.5 GWh in 2024.
Ford claims that its three new battery factories would increase manufacturing capacity to 129 GWh per year. General Motors plans four additional battery factories in the United States (also with LG Chem) with a total annual capacity of 140 GWh, while Volkswagen plans six battery cell manufacturing sites in Europe by 2030 with a total annual capacity of 240 GWh. Stellantis also plans to build a new facility in Indiana with an initial annual production capacity of 23 GWh.
Honda has previewed two forthcoming EVs: the Honda Prologue 2024 and the Precision Acura concept. The Prologue will be the first of two cars co-developed by Honda and GM that will use GM’s Ultium battery packs. Beginning in 2027, GM and Honda intend to create “millions” of inexpensive EVs.