TOKYO: Japanese automaker Honda Motor Co and South Korea’s LG Energy Solution Ltd will invest US$4.4 billion (RM19.75 billion) to jointly establish a lithium-ion battery plant in the United States.
The joint venture with the South Korean battery giant will supply batteries for electric vehicles, as the US market for such vehicles is expanding rapidly, reported Jiji press.
Honda aims to accelerate US production in order to clinch a bigger share of the country’s auto market.
Construction of the plant is set to begin early next year, with production expected to start in 2025.
Honda will invest US$1.7 billion in the venture for a 49 per cent stake, and the automaker said that it will make the investment in stages from the current fiscal year.
All batteries produced at the plant will be supplied to Honda’s North American factories.
The automaker’s four-wheel vehicle sales in North America in fiscal 2021 stood at around 1.28 million units, over 30 per cent of its global sales and more than double the roughly 540,000 units sold in Japan.
Honda is also considering creating a new production line exclusively for electric vehicles in late 2025 or early 2026 as part of its plan to boost annual electric vehicle production in North America to about 800,000 units by 2030.
The United States has revised its tax breaks for new car sales to a system that favours domestic production.
Meanwhile, the state of California, which boasts a large market, has adopted a plan to ban sales of new gasoline-powered vehicles in 2035.
Honda plans to release two new SUV electric vehicle models in 2024. Both are being developed jointly with General Motors Co and will be equipped with the US auto giant’s batteries. – BERNAMA
