The latest in a slew of automakers announcing plans to invest in the American production of battery cells for electric vehicles (EVs), Honda and LG Energy Solution are investing $4.4 billion to build a battery assembly plant in the U.S., helping Honda with its mission to completely phase out its fossil-fuel vehicles by 2040.
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.
Honda plans to spend $36 billion on its transition of gas-powered cars into EVs over the next decade by launching around 30 new models.
“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.”
While Ohio is the expected general area, a definite location hasn't been decided as of yet. Bloomberg reported in June that Ohio is a front-runner, and the Japanese firm already has car plants there. It also has auto plants in Alabama and Indiana.
Construction is expected to start by early 2023, and mass production is slated to start at the end of 2025. The factory will be able to assemble enough batteries each year to produce 40 gigawatt-hours of energy and will be producing pouch-type cells for Honda and Acura EVs. The facility will be built and operated by a joint venture between the companies, which is expected to be established this year.