TORRANCE, CA—Honda and South Korean battery maker LG Energy Solution will spend $4.4 billion to build a new battery assembly plant in the United States as the Japanese carmaker seeks to phase out fossil-fuel vehicles completely by 2040.
The factory will be able to assemble enough batteries each year to produce 40 gigawatt-hours of energy. Construction is expected to start by early 2023, and mass production slated to start at the end of 2025. The location of the plant has not yet been decided, but Ohio is considered the front-runner.
Honda plans to spend $36 billion on its push into EVs over the next decade by launching some 30 new models, one of the most aggressive expansions of electrification in Japan. The new plant will produce pouch-type cells for Honda and Acura EVs.
“Honda is working toward our target to realize carbon neutrality for all products and corporate activities…by 2050,” says Honda CEO Toshihiro Mibe. “Aligned with our long-standing commitment to build products close to the customer, Honda is committed to the local procurement of EV batteries.”
With the recent enactment of the Inflation Reduction Act, foreign automakers face increasing pressure to manufacture EVs in the U.S. For consumers to earn the maximum $7,500 tax credit for purchasing an EV, the vehicle must be made in the U.S. With the exception of the Nissan Leaf, no other Japanese EV model would qualify for subsidies under the new rules.
