LG Energy Solution And Honda Agree To Build A Joint Company For EV Battery Production

JAKARTA - LG Energy Solution and Honda Motor Co., Ltd. confirmed that they agreed to set up a joint venture (Joint Venture) for the production of lithium ion batteries which is scheduled to be established in 2022.

Based on the press releases shared, the two companies will build their factories in the US, which are then used to power Honda and Acura Model EVs in the North American market.

The decision to set up a joint venture battery factory in the US is based on the confidence of the two companies to expand production of local electric vehicles.

#BREAKING: Honda and LGES today announced an agreement to establish a joint venture to produce #electricvehicle batteries in the U.S.The new initiative will power @Honda and @Acura #EV models built for our customers across North America. Learn more: https://t.co/YXHgyuzMoW pic.twitter.com/z3OYbwj1qv

— Honda In America (@HondaInAmerica) August 29, 2022

LGES and Honda are also confident that the timely supply of batteries will put them in the best position to target North America growing rapidly as an electric car market.

"With this agreement, LGES and Honda will invest a total of 4.4 billion US dollars and set up a new joint venture (JV) factory in the US," the company said in a written statement.

Honda said that the factory will have an annual production capacity of around 40GWh. The type of bag battery produced in the new JV plant will be supplied exclusively to Honda facilities in North America.

The location of the joint venture has not been completed. However, the two companies plan to start construction in early 2023, and hope to be able to mass-produce lithium ion batteries by the end of 2025.

"Our joint venture with Honda, which has a significant brand reputation, is another milestone in our medium to long-term strategy to promote electrification in the fast-growing North American market," said Youngsoo Kwon, CEO of LG Energy Solution.

Kwon added, to gain the trust and respect of his customers, they aspire to position themselves as leading battery innovators.

On the other hand, Toshihiro Mibe, President, CEO and Director of Honda Motor Co. Representative, Ltd said that Honda is working to realize carbon neutrality for all products and company activities involving the company by 2050.

In line with our long commitment to building products close to customers, Honda is committed to procuring local EV batteries which are important components of EVs. The initiative in the US with LGES, a leading global battery producer, will be part of the Honda approach," he said.