The two companies are planning to build a $4.4 billion electric vehicle battery factory in the US.
The US electric vehicle lineup will be powered by batteries produced by a joint venture between Honda and LG Chem. Aiming to begin construction in early 2023 to enable the start of mass production of lithium-ion battery cells by the end of 2025, Honda and its subsidiary Acura plan to produce 30 hybrid, battery-electric, and fuel-cell vehicles by 2030.
According to The Wall Street Journal, the factory, which aims to have an annual production capacity of approximately 40GWh, is most likely situated in Ohio. Furthermore, LG Chem and General Motors are building battery plants in that state worth $2.3 billion.
Under the new credit tax rules, entities that invest in battery factories based in North America are required to abide by the Inflation Reduction Act and the United States-Mexico-Canada Agreement.
For automakers seeking to qualify for the $7,500-per-vehicle tax credit, which requires EVs to be assembled in the US, localizing battery production in the US is crucial. Concerns have been expressed by foreign automakers that the upcoming tax credits could discriminate against companies without US manufacturing facilities.
A statement by GlobalData denotes that the world’s battery production is forecasted to grow to 410.5 GWh in 2024. This is a huge leap from 95.3 gigawatt hours (GWh) in 2020.
Honda has teased two upcoming electric vehicles, the 2024 Honda Prologue and an Acura concept called the Precision.
GM’s Ultium battery packs will be used in Honda’s Prologue, the first of two vehicles it is co-developing with the US automaker. The two automakers, General Motors (GM) and Honda, have committed to producing “millions” of affordable electric vehicles by 2027.
Electric vehicles’ development is expected to cost the automaker $40 billion in the next few years, according to Tech Times.
