Honda, LG Energy plan $4.4 billion EV battery factory in US

Tokyo-

Honda Motor Co.

HMC -2.55%

And

LG Energy Solution Ltd

373220 -1.29%

On Monday they announced plans to build a $4.4 billion electric-vehicle battery factory in the United States, the latest tie-up between automakers and battery suppliers that seeks to expand capacity by sharing upfront costs.

The companies said they plan to start construction of the factory early next year and start mass production by the end of 2025. The plant has an annual production capacity of around 40 GW-hours and will exclusively supply its production to Honda facilities in the north. America, they said.

The companies did not disclose where in the US the factory would be built, but people familiar with the matter said it was planned for Ohio.

Tokyo-based Honda and South Korea’s LG Energy join a growing list of joint ventures between automakers and battery suppliers planning new factories in the United States.

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In January, General Motors Co It will build a $2.6 billion battery plant in Lansing, Mich. with LG Energy. Four months later,

Stellandis

of NV and South Korea

Samsung SDI Co.

He said let’s join the team $2.5 billion plant in Indiana.

Battery prices are rising on the back of rising demand Skyrocketing raw material costs, according to S&P Global Ratings, partnerships between the industries may develop over the next few years. According to a recent S&P report, carmakers are spending more on their battery supply chains, and this is leading them to opt for EV tie-ups to achieve economies of scale.

Automakers are deepening ties with China, the big three battery makers

Modern Ambrex technology Co.

Or CATL, LG Energy and Japan

Panasonic Holdings Corp

– All these move to expand capacity on their own.

Tesla Inc.

Supplier Panasonic Building a $4 billion EV battery plant In Oklahoma, The Wall Street Journal reported last week. It comes after the Japanese company announced a similar-sized plant in Kansas in July.

S&P Global Ratings expects CATL, LG Energy and Panasonic to hold more than 50% of the market share for EV batteries by 2025.

For Honda, the Ohio plant is one of its first major investments in building its own EV battery supply chain. GM and Honda are in partnership Developing a range of affordable EVsSplitting development costs deepens strategic relationships.

Write to River Davis at [email protected] and Dasl Yoon at [email protected]

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