— Seoul, Korea
LG Energy Solution (LGES; KRX: 373220) and Honda Motor Co., Ltd. (NYSE:HMC) today announced an agreement to establish a joint venture (JV) company to produce lithium-ion batteries in the U.S. to power Honda and Acura EV models for the North American market.
With this agreement, LGES and Honda will invest a total of USD $4.4 billion and establish a new JV plant in the U.S. The plant aims to have an annual production capacity of approximately 40GWh.
The pouch-type batteries produced at the new JV plant will be supplied exclusively to Honda facilities in North America. While the location for the joint venture plant is yet to be finalized, based on Honda’s plans for EV production in North America, the two companies aim to begin construction in early 2023, in order to enable the start of mass production of advanced lithium-ion battery cells by the end of 2025.
LGES and Honda made the decision to establish the joint venture battery plant in the U.S. It’s based on the shared belief that expanding local electric vehicle production. Also ensuring the timely supply of batteries. For it would put them in the best position to target the rapidly-growing North American EV market.
“Our joint venture with Honda, which has significant brand reputation. Because is yet another milestone in our mid- to long-term strategy of promoting electrification in the fast-growing North American market,” said Youngsoo Kwon, CEO of LG Energy Solution. “Since our ultimate goal is to earn our valued customers’ trust and respect. For we aspire to position ourselves as a leading battery innovator. Thereby working with Honda in achieving its core initiatives for electrification. That’s as well as providing sustainable energy solutions to discerning end consumers.”
From comments I received from Toshihiro Mibe. For he is the President, CEO and Representative Director of Honda Motor Co., Ltd. So this is big. He stated Honda is working toward their targets. Well never heard that too much. But it’s to realize carbon neutrality for all products. Also, corporate activities the company will be actively involved in by 2050. What is 2050 goals? But I am glad to see something positive is happening out there!
Honda, Build Your Own Electric Vehicles!
They added this is aligned with their longstanding commitment to build products close to the customer. So I guess they get now we want electric cars and to stop playing!!
They added Honda is committed to the local procurement of EV batteries. All which is a critical component of EVs. This initiative in the U.S. with LGES. For they are the leading global battery manufacturer. It will be part of “such a Honda approach.”
The joint venture is scheduled to be established in 2022. In addition, the closing is subject to customary closing conditions, including regulatory approvals.