Honda Motor Co. and LG Energy Solution will invest $4.4 billion through a joint venture to establish a new lithium-ion battery factory in the U.S. to power Honda and Acura electric vehicle models.
The plant, which will aim to have an annual production capacity of approximately 40 gigawatt hours, is expected to begin construction in early 2023 with the goal of mass-producing advanced lithium-ion battery cells by the end of 2025. The pouch-type batteries produced at the new JV plant will be supplied exclusively to Honda facilities in North America.
Though the official location for the plant has not been finalized, the companies are considering Ohio, according to Nikkei.
A representative for Honda did not immediately return FOX Business' request for comment.
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The joint venture, which is scheduled to be established in 2022, is subject to customary closing conditions, including regulatory approvals.
Japan-based Honda is planning to roll out 30 electric vehicle models globally and produce 2 million EVs per year by 2030. The company has also set a goal for carbon neutrality in all of its products and corporate activities by 2050.
The move comes amid a growing push by the U.S. government to expand its EV and battery manufacturing. President Biden recently signed the $430 billion Inflation Reduction Act, which includes a provision that makes electric vehicles manufactured outside of North America ineligible for tax credits.
By 2035, California plans to require all new vehicles sold in the state to be either fully electric or plug-in electric hybrids.
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In addition to Honda, LG Energy has signed joint-venture agreements with General Motors, Hyundai and Stellantis.
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In July, Panasonic Energy, a major Tesla supplier, selected Kansas as the new site for a $4 billion battery plant. Sources told The Wall Street Journal on Friday that Panasonic is considering Oklahoma for an additional roughly $4 billion battery plant.
Reuters contributed to this report