South Korean battery giant LG and Japanese automaker Honda are investing $4.4 billion in a U.S. joint venture to produce batteries for Honda’s electric vehicles in the North American market, the companies said. announced on Monday.
The location of the factory has yet to be determined, but construction is expected to begin in early 2023, with mass production of advanced lithium-ion battery cells to begin by the end of 2025.
The joint venture is expected to be established this year and closing of the transaction is subject to regulatory approvals.
Youngsoo Kwon, CEO of LG Energy Solutions, said the joint venture with Honda, a well-known brand, is another milestone in the company’s medium- to long-term strategy to promote electrification in the fast-growing North American market. says.
The plant will produce batteries exclusively for Honda vehicles assembled in North America, including the company’s luxury brand Acura, according to a joint statement.
LG, a leading manufacturer of lithium-ion batteries for electric vehicles and power systems, already manufactures lithium-ion batteries in joint ventures with US automakers General Motors and Ford Motor and South Korea’s Hyundai Motor Group.
The company is headquartered in Seoul, South Korea, but has operations around the world, including the United States, China, and Australia.
Demand for electric vehicles is expected to grow in the United States and many other countries due to concerns over climate change, pollution, and rising gasoline prices. All of the world’s top car manufacturers are strengthening their EV lineups.
Honda is working toward its goal of being carbon neutral in all products and corporate activities in which it is involved by 2050.
New US legislation includes a tax credit of up to US$7,500 that can be used to help pay for the purchase of an electric vehicle.
However, to be eligible for the full credit, the electric vehicle must have batteries manufactured in North America and contain 40% of metals mined or recycled on the continent.
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