GREENSBURG, Ind. — Major South Korean battery maker LG and Japanese automaker Honda are investing $4.4 billion in a joint venture in the United States to produce batteries for Honda electric vehicles in the North American market, the two companies said Monday.
The plant’s site is still undecided, but construction will begin in early 2023, with mass production of advanced lithium-ion battery cells to start by the end of 2025, they said. It's likely to be near Marysville, Ohio, or Greensburg, Indiana, where Honda has huge factories that make its most popular models such as the Accord, CR-V and Civic.
The joint venture is to be set up this year, with the closing of the deal subject to regulatory approval.
“Our joint venture with Honda, which has significant brand reputation, is yet another milestone in our mid- to long-term strategy of promoting electrification in the fast-growing North American market,” said LG Energy Solution Chief Executive Youngsoo Kwon.
The plant will produce batteries exclusively for Honda vehicles assembled in North America, including the company’s Acura luxury brand, according to a joint statement.
Honda's joint venture plant is part of a larger trend of automakers announcing U.S. battery factories as they try to establish a domestic supply chain for the next generation of vehicle propulsion. Ford, General Motors, Toyota, Hyundai-Kia, Stellantis and VinFast have announced plans for 10 U.S. battery plants.
A new U.S. law gives them even more incentive to build batteries in North America. It includes a tax credit of up to $7,500 that could be used to defray the cost of purchasing an electric vehicle. But to qualify for the full credit, the electric vehicle must contain a battery built in North America with 40% of the metals mined or recycled on the continent.
“Honda is working toward our target to realize carbon neutrality for all products and corporate activities the company is involved in by 2050,” said Honda Chief Executive Toshihiro Mibe.
LG, a leading manufacturer of lithium-ion batteries for electric vehicles and power systems, already makes them in joint ventures with U.S. automakers General Motors and Ford Motor Co., as well as South Korea’s Hyundai Motor Group. The company is headquartered in Seoul, South Korea, but has operations across the world, including the U.S., China and Australia.
Demand for electric vehicles is expected to grow in the U.S. and many other nations because of concerns about climate change and pollution, as well as rising gas prices. All of the world’s top automakers are strengthening their EV lineups.
LMC Automotive, a Detroit-area consulting firm, expects EVs to be 5.6% of U.S. new vehicle sales this year, rising to more than 36% by 2030. Globally, LMC says 8.6% of new vehicle sales will be electric this year, and that will jump to 33% by 2030.
Honda is working with GM to co-develop electric vehicles, including Honda and Acura SUVs. The Honda is expected to go on sale in early 2024, followed soon by the Acura luxury brand. Honda also has said it plans to make its own electric vehicles later this decade.
13News reached out to the Indiana Economic Development Corporation for details on any work being done to secure the facility for Indiana, but have not received a response at the time of this article's publishing.
$2.5B electric vehicle battery plant coming to Kokomo; will bring 1,400 jobs
In May, Stellantis, the parent company of Chrysler, and Samsung announced they will invest more than $2.5 billion in a new electric vehicle battery plant in Kokomo, Indiana.
The companies said the plant will bring 1,400 new high-wage jobs with it.
This will be Samsung's first manufacturing operation in the U.S.
“It’s another incredibly exciting day to be back in Kokomo celebrating such a transformational investment from Stellantis and our new partners at Samsung,” said Gov. Eric Holcomb. “Today’s announcement is another step toward positioning Indiana as a leader in the future of mobility, battery technology and clean energy.”
The plant will be built near the existing Stellantis facility in Kokomo. The final investment in the plant could reach $3.1 billion.
The facility will supply battery modules for a range of electric vehicles produced at Stellantis’ North American assembly plants.
“Our goals for the growth of Indiana’s economy are ambitious,” said Sec. Chambers. “This significant venture with Stellantis and Samsung SDI is squarely in line with our 5E focus on the energy transition and building an economy of the future. Large-scale investments like this are a testament to Indiana’s business-friendly climate, its strong workforce, a growing population and our continued investment in quality of life. The economic growth and momentum in our state this year is unprecedented.”
“Just under one year ago, we committed to an aggressive electrification strategy anchored by five gigafactories between Europe and North America,” said Carlos Tavares, Stellantis CEO. “Today’s announcement further solidifies our global battery production footprint and demonstrates Stellantis’ drive toward a decarbonized future outlined in Dare Forward 2030. I am grateful to Governor Holcomb and Secretary Chambers along with Mayor Moore, and their teams as well as all my colleagues for their support and dedication to bring this operation to Kokomo, a city that holds a rich and long history for our company.”
Construction is scheduled to begin later this year with production operations planned to launch in the first quarter of 2025.
“We would like to thank our partner, Stellantis, for its continued investment, support and faith in this community for over 85 years,” said Mayor Tyler Moore. “We would also like to thank Samsung SDI for its confidence in us and look forward to working together for the decades to come. This multi-billion dollar investment will help solidify Kokomo as a global leader in automotive manufacturing.”
The investment could gradually increase up to $3.1 billion. Plant operations are expected to achieve an initial annual production capacity of 23 gigawatt-hours (GWh), with an increase to 33 GWh over the next few years. For comparison, a single gigawatt-hour is enough to power 110 million LED bulbs.
Stellantis announced plans in October 2021 to invest $229 million in its Kokomo operations to support its goal of achieving 40% low-emission vehicle sales in the U.S. by 2030, along with a $400 million investment, announced in 2020, to expand and retool its Indiana Transmission Plant II for production of its new GMET4 engine.