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Major South Korean battery maker LG and Japanese automaker Honda are investing USD 4.4 billion in a joint venture in the United States to produce batteries for Honda electric vehicles in the North American market, the two companies said on Monday.
The plant's site is still undecided, but construction will begin in early 2023, with mass production of advanced lithium-ion battery cells to start by the end of 2025, they said.
The joint venture is to be set up this year, with the closing of the deal subject to regulatory approval.
Our joint venture with Honda, which has 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 LG Energy Solution Chief Executive Youngsoo Kwon.
The plant will produce batteries exclusively for Honda vehicles assembled in North America, including the company's Acura luxury brand, according to a joint statement.
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LG, a leading manufacturer of lithium-ion batteries for electric vehicles and power systems, already makes them in joint ventures with US automakers General Motors and Ford Motor Co., as well as South Korea's Hyundai Motor Group.
The company is headquartered in Seoul, South Korea, but has operations across the world, including the US, China and Australia.
Demand for electric vehicles is expected to grow in the US and many other nations because of concerns about climate change and pollution, as well as rising gas prices. All of the world's top automakers are strengthening their EV lineups.
Honda is working toward our target to realise carbon neutrality for all products and corporate activities the company is involved in by 2050, said Honda Chief Executive Toshihiro Mibe.
A new US law includes a tax credit of up to USD 7,500 that could be used to defray the cost of purchasing an electric vehicle.
But to qualify for the full credit, the electric vehicle must contain a battery built in North America with 40 per cent of the metals mined or recycled on the continent.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
