Korea’s LG Energy Solution and Japan’s Honda Motor announced their joint venture to build an electric vehicle (EV) battery plant in the United States.
Honda Motor and LG Energy Solution today signed the agreement for the 5.1 trillion-won ($4.4 billion) joint venture. The new entity will build the EV battery production facility with an annual capacity of 40 gigawatt hours.
LG Energy Solution will make an initial investment of $1.8 billion in the joint venture and more in the coming years through 2027. LG Energy Solution will have 51 percent stake in the joint venture company for doing EV battery business.
LG Energy Solution CEO Kwon Young-soo and Honda Motor CEO Toshihiro Mibe attended the signing ceremony.
The location of the plant has yet to be decided.
The EV battery plant will manufacture pouch battery cells and modules starting late 2025, and the output from the plant will be mainly supplied for Honda’s premium Acura EV models.
LG Energy Solution is the world’s second-largest battery maker. LG Energy Solution is investing more than 20 trillion won to boost its production capacity in North America.
LG Energy Solution has formed joint ventures with General Motors and the Chrysler parent, Stellantis to produce and supply the EV batteries.
LG Energy Solution is also pushing to expand its existing standalone factory in the U.S. state of Michigan and weighing the plan to build its second standalone cylindrical battery plant in Arizona, after it said it was reassessing the project amid rising costs.
Honda, the sixth-highest selling carmaker in North America, has unveiled a plan to invest 5 trillion yen ($40 billion) for electrification with an aim to sell over 2 million EVs by 2030.