Honda Motor Co., Ltd (NYSE: HMC) and LG Energy Solution (KRX: 373220) inked a deal to establish a joint venture company to manufacture lithium-ion batteries in the United States.
The joint venture will invest a total of $4.4 billion to build a new plant to produce lithium-ion batteries to power Honda and Acure electric vehicle (EV) models for the North American market.
Earlier this year, Honda announced its plan to release 30 EV models worldwide and to produce approximately two million EV units annually by 2030.
Honda and LG Energy haven’t finalized the location of the new EV battery plant with an annual production capacity of approximately 40GWh. The joint venture aims to start construction early next year and to start the mass production of advanced lithium-ion battery cells by the end of 2025.
Both companies shared the belief that expanding local EV production in the U.S. and ensuring the timely supply of batteries would put them in the best position in the fast-growing North American EV market.