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If you’ve been wondering if LG, Honda and GM are going to start a joint venture in the US to produce electric vehicle batteries, you’re not alone. The two Korean car manufacturers are already working on battery production sites in many countries. However, they’ve decided to focus their efforts in the US, and have set up joint ventures with companies in Tennessee and Ohio.
EV battery plant to be built in Ohio
According to recent reports, LG Honda and LG Energy Solution are eyeing the Midwest to build a new battery plant. Ohio is a top candidate, as it is home to both companies’ auto manufacturing facilities. Moreover, it is easier to transport the batteries there, making it a prime location for the new EV battery plant. However, no final decision has yet been made. There are still private discussions taking place. LG Energy Solution has declined to comment on the speculation.
According to LMC Automotive, a consulting firm based in Detroit, the number of electric vehicle sales in the United States will grow to 5.6% in 2019 and three-quarters of global sales by 2030. Honda is already developing electric vehicles and is collaborating with GM to develop affordable models. It also plans to start making its own EVs later in the decade.
The joint venture between Honda and LG will build pouch-type batteries for EVs. The two companies have not yet decided on the location of the plant, but they expect to break ground sometime in 2023. The facility will produce lithium-ion battery cells that will go into Honda and Acura EVs in North America. The partnership also aims to support local production of EVs.
While the two companies do not confirm whether or not they have joint ventures with other automakers, this partnership is noteworthy for its scale and scope. LG is currently involved in battery production in several countries, and plans to invest nearly $6 trillion dollars in North America by 2024. It also plans to establish two new battery plants in the U.S. – one in Ohio and one in Tennessee – with GM’s Ultium platform. And LG and GM are also partnering with Stellantis NV, a company that produces battery modules.
The joint venture between LG Energy Solution and Honda Motor is estimated to cost more than 4 trillion won ($3.4 billion) to build and run, with a production capacity of 40 gigawatt-hours per year. However, the exact location of the plant has not yet been finalized, and details on the project will be revealed within six months.
EV battery plant to be built in Oklahoma
Two automakers are working to build battery plants for electric vehicles in the United States. Honda and LG Energy Solutions have signed joint venture deals to build a battery plant in Oklahoma. Both automakers want to make batteries for EVs locally to take advantage of a $7,500 tax credit for each electric vehicle sold. While this new tax credit is a big incentive for automakers, many have concerns about its impact on overseas companies.
Increasing demand and skyrocketing raw material costs have pushed battery prices sky-high. As a result, auto makers are looking to establish joint ventures with battery manufacturers to achieve economies of scale. Earlier this year, Panasonic introduced plans for a $4 billion EV battery plant in Kansas, which is similar to the one LG Honda will build in Oklahoma.
The new partnership between Honda and LG Energy Solutions is expected to begin production in 2025. The companies will use the new facility to manufacture lithium-ion batteries for Honda and Acura EV models in North America. The new facility is expected to cost $4.4 billion and will produce 40GWh of lithium-ion batteries annually.
While the Panasonic and LG plant will take a couple of years to build, domestic battery production is already ramping up. General Motors has also confirmed a new battery plant in Lordstown, Ohio. Ford Motor Company also announced plans for three new battery facilities in Kentucky and Memphis. One of the facilities will be the largest in the United States, producing batteries for the next-generation F-150 Lightning and two new battery-electric pickups.
The joint venture is one of the most significant investments in the EV battery industry. The two automakers are committed to making their electric vehicles as inexpensive as possible. In addition, GM and Honda are developing a joint line of affordable EVs and cutting development costs.
As the demand for battery-powered cars grows in the U.S. and worldwide, the joint venture could produce up to 400,000 to 600,000 battery-powered cars a year. It would be able to meet the demand for batteries for all electric vehicles.