Ohio to become the base for LGES-Honda's first battery JV

[Source: LG Energy Solution Ltd.]

South Korean battery maker LG Energy Solution Ltd. (LGES) and Japan’s Honda Motor Co. are settling their first joint-venture battery plant in Ohio, one of the Rust Belt regions in the United States to score points amid increasing America-first movement in the world’s top economy.

LGES and Honda announced Wednesday that they will be establishing a joint battery facility to produce battery modules in Fayette County in Ohio, located 64 kilometers southwest of Columbus. Construction of the joint factory will begin early next year with an aim to launch mass production of pouch batteries at the end of 2025.

The two earlier in the year had declared $4.4 billion in a rare JV between the two neighboring countries with ties strained over past and trade issues to establish a 40 gigawatt hour (GWh) annual capacity battery plant to power Honda’s 500,000 high-performance all-electric cars with a driving range of more than 500 kilometers per single charge.

The batteries will be mounted on premium brand Acura EVs.

Honda – which operates 12 auto production and component facilities in the U.S. – considers factories in Ohio a key base for electrification. The Japanese carmaker produces hybrid vehicles for Honda Accord and CR-V at its Marysville Auto Plant and East Liberty Auto Plant in Ohio.

“This is a very challenging time for our entire industry, but also a very exciting time as Honda invests in full electric vehicle production in the Buckeye State,” said Bob Nelson, executive vice president of American Honda Motor. “Honda has built hybrid-electric vehicles in Ohio for a number of years, and the experience and expertise of our associates in manufacturing, product development, and purchasing will serve as an important foundation as we transition to the electrified future.”

Honda plans to produce and sell EVs in North America from 2026. The automaker is considered most active among Japanese car brans on electrification strategy. It plans to invest 48 trillion won ($33.7 billion) by 2030 to produce more than 2 million EVs of 30 different models globally. It plans to stop production of internal combustion locomotives in 2040.

LGES will be behind power of eight of world’s top 10 carmakers – Volkswagen, Renault-Nissan, Hyundai-Kia, Stenllatis, General Motors, Ford, BMW, and Honda.

The joint battery facility in Ohio is expected to create 2,200 jobs. Ohio government is mulling subsidies on the joint venture.

U.S. President Joe Biden welcomed the establishment of the joint facility in Ohio Tuesday, local time, noting that “it’s another win for America and another win for Ohio.”

“As I said at the groundbreaking of Intel’s Ohio factory last month: it’s time to bury the label ‘Rust Belt,’” he said. “Just as my CHIPS and Science Act is spurring record investments in communities across the country, my Inflation Reduction Act is driving a manufacturing boom for electric vehicles.”

“This has been the backbone of my economic plan: America is leading the world again, rebuilding our supply chains, infrastructure, and manufacturing here at home,” Biden said.

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