Honda and LG Energy Solution (LGES) have announced a joint venture agreement for the production of lithium-ion batteries in the United States, destined for Honda and Acura vehicles to be sold in the North American market. Through this agreement, Honda and LG will invest US$4.4 billion (RM19.7 billion) for the upcoming battery plant in the US, which will have an annual production capacity of 40 GWh.

The batteries to be produced at the joint venture plant in the United States will be pouch-type batteries which will be supplied exclusively to Honda plants in North America, and construction of the plant is scheduled to begin early next year to enable the start of mass production of the advanced lithium-ion battery cells by the end of 2025, said Honda. The location of the battery plant has yet to be finalised.

“Aligned with our longstanding commitment to build products close to the customer, Honda is committed to the local procurement of EV batteries which is a critical component of EVs. This initiative in the US with LGES will be part of such a Honda approach,” said Honda CEO and president Toshihiro Mibe.

“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. Since our ultimate goal is to earn our valued customers’ trust and respect, we aspire to position ourselves as a leading battery innovator, working with Honda in achieving its core initiatives for electrification, as well as providing sustainable energy solutions to discerning end consumers,” said LGES chief executive Youngsoo Kwon.

Beyond its joint venture with LG, Honda has also signed a joint development deal with Boston-based battery R&D firm SES for the firms’ collaboration in lithium-metal battery development, which are expected to yield greater energy density than those of lithium-ion batteries.

As for the Japanese automaker’s EV presence in North America, Honda has also finalised its cooperation with General Motors for the development of affordable EVs on a new global architecture using next-generation Ultium battery technology. The new EVs from this joint effort with GM is scheduled to go on sale in 2027.

Meanwhile, the Korean battery manufacturer has also been working with Hyundai for a joint battery manufacturing plant in Indonesia, which commenced construction last September. Financing was secured last week for the Indonesian battery plant, and this will begin mass-producing batteries in the first half of 2024.