LG and Honda set up US joint venture to make electric vehicle batteries

TOKYO – Major South Korean battery maker LG and Japanese automaker Honda are investing $4.4 billion in a joint venture in the United States to produce batteries for Honda electric vehicles in the North American market, the authorities announced on Monday. two companies.

The plant site is still undecided, but construction will begin in early 2023, with mass production of advanced lithium-ion battery cells to begin by the end of 2025, they said.

The joint venture is to be created this year, with closing of the deal subject to regulatory approval.

“Our joint venture with Honda, which enjoys an important brand reputation, is another important step in our medium to long-term strategy to promote electrification in the fast-growing North American market,” said Youngsoo Kwon, general manager of LG Energy Solution.

The plant will produce batteries exclusively for Honda vehicles assembled in North America, including the company’s luxury Acura brand, according to a joint statement.

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LG, a leading maker of lithium-ion batteries for electric vehicles and power systems, already manufactures them through joint ventures with U.S. automakers General Motors and Ford Motor Co., as well as the southern group -Korean Hyundai Motor. The company is headquartered in Seoul, South Korea, but does business around the world, including the United States, China, and Australia.

Demand for electric vehicles is expected to increase in the United States and many other countries due to concerns about climate change and pollution, as well as rising gasoline prices. All of the world’s biggest automakers are bolstering their electric vehicle lines.

“Honda is working towards our goal of achieving carbon neutrality for all products and corporate activities in which the company is involved by 2050,” Honda Chief Executive Toshihiro Mibe said.

A new US law provides a tax credit of up to $7,500 that could be used to defray the cost of purchasing an electric vehicle. But to receive full credit, the electric vehicle must contain a battery made in North America with 40% of the metals mined or recycled on the continent.

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