LGES and Honda establishes JV for EV LiB production worth $4.4 billion in the US

LG Energy Solution and Honda Motor have 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 pact, 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, to enable the start of mass production of advanced lithium-ion battery cells by the end of 2025.

LGES and Honda decided to establish the joint venture battery plant in the U.S., based on the shared belief that expanding local electric vehicle production and ensuring the timely supply of batteries would put them in the best position to target the rapidly-growing North American EV market.

"Our joint venture with Honda, which has a significant brand reputation, 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.

"Honda is working toward our target to realize carbon neutrality for all products and corporate activities the company is involved in by 2050," said Toshihiro Mibe, President, CEO, and Representative Director, of Honda Motor.

"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."

The joint venture is scheduled to be established in 2022. The closing is subject to customary closing conditions, including regulatory approvals.