Japanese automotive giant Honda Motor Co. Ltd. will be partnering with LG Energy Solution (LGES), LG Chem’s battery subsidiary, on a joint venture for battery production in the U.S. that could cost up to $3.4 billion USD — reports Automotive News.
The news comes from South Korea’s Maeil Business Newspaper and is based on a tip from an unnamed industry source.
According to the report, the potential Honda-LGES battery production facility could produce up to 40 gigawatt-hours (GWh) worth of electric vehicle (EV) batteries. That would be enough to power 600,000 EVs.
LG Energy Solutions holds a market share of over 20% in the global EV battery supply and provides batteries to Tesla, General Motors, Volkswagen, and more. In October 2020, LGES parent LG Chem announced plans to triple battery production capacity.
“We are discussing various ways to cooperate with automakers, including establishing joint ventures, but nothing has been decided,” LGES said in a statement.
Last year, Honda announced it would seek partners to help build electric vehicles instead of going at it alone. The veteran carmaker is currently developing two large-sized EV models in North America for a 2024 debut using batteries from General Motors, which is also working with LG to manufacture its Ultium batteries.
“This is not something that Honda has announced. We cannot comment on speculation,” said a Honda spokesperson in Tokyo.
LG Energy Solution already has battery production facilities in the United States, China, South Korea, Poland and Indonesia. The EV battery maker plans to invest around $4.7 billion USD in battery manufacturing in North America by 2024 to secure a production capacity of more than 160 GWh by 2025 in the region, according to a company filing.
In addition to the new joint venture with Honda, LGES is also building two new U.S. plants with GM in Ohio and Tennessee, and another with Stellantis NV.
With the launch of its first electric vehicles soon approaching, Honda recently questioned EV demand and said it would tread carefully. However, this joint venture would indicate that the automaker sees its future in electrification.
