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Honda is latest automaker to plan big U.S. battery plant — just in time for new EV tax credit

Honda and LG are planning a $4.4 billion battery plant to supply lithium-ion battery packs for models including the 2024 Acura ZDX crossover.


Honda Motor Co., which does not sell any battery-only vehicles in the U.S., is accelerating plans to develop this emerging market by jointly operating a $4.4 billion U.S. factory with LG Energy Solutions. The location of the plant will ensure its future electric vehicles are eligible for a revised federal tax credit.

The automaker said in Tokyo on Monday that it is working on A joint venture with LG will open a facility in 2025 that will produce 40 gigawatt hours of lithium-ion batteries a year, with construction starting next year. The Wall Street Journal reports that the new factory will be located in Ohio, here It is Honda’s main North American production base and engineering operations, citing people familiar with the matter. Honda spokesman Marcos Frommer declined to confirm this.

The news comes after the passage of the Reducing Inflation Act this month, which includes a new $7,500 federal tax credit for consumers buying electric vehicles. But unlike previous versions of the credit, eligible vehicles must be built in North America, and 50 percent of critical battery components, such as positive and negative electrodes, also need to be built in North America. To receive full credit, at least 40 percent of critical battery materials must be mined or refined in the U.S. or a country with which they have free trade agreements, or the materials must be recycled in North American factories.

Youngsoo Kwon, CEO of LG Energy Solution, Toshihiro Mibe, President and CEO of Honda.


Honda’s talks with LG predate US tax credit rules, Frommer said. Automotive tech analyst at Guidehouse, ex-Ford engineer, Forbes.

“Things like this don’t happen overnight,” Abu Samed. “If you look at the trends across the industry, the industry has been moving in the direction of local battery production over the past few years.”

The U.S. is seeing a whole new production base to support electric vehicles. In the past year, General Motors, Ford, Volkswagen, Hyundai, Toyota, Panasonic, Redwood Materials and Sila, which also have battery partnerships with Honda, have announced plans for tens of billions of dollars worth of battery factories and battery module facilities in the region. few. Elon Musk’s Tesla is so far the only high-volume automaker with its own dedicated battery manufacturing operation in the US

Tesla’s competitor in battery It relies on South Korea and China and materials, although U.S.-China trade tensions and concerns about global supply chains have made this increasingly challenging.

“With the number of EV nameplates planned for production increasing dramatically, it now makes more sense to localize production,” Abuelsamid said. “Batteries are big, heavy, and bulky, transporting them [costs] a lot, and transporting them is challenging from a safety standpoint.”

Honda said, Its first purpose-built electric vehicle, the Prologue SUV, will go on sale in 2024. The company is also preparing to launch the ZDX electric SUV for its high-end Acura lineup in 2024.

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