Honda and LG Chem are planning to construct an electric vehicle battery plant in the US which will cost $4.4 billion.
The said joint venture came after other automakers declared production of EV batteries in the country as part of their "zero-emission" goals.
The construction of the new EV battery factory will be made in compliance with the new tax credit regulation.
Honda and LG to Build EV Battery Site
According to a report by The Verge on Monday, Aug. 29, Honda and LG recently announced that the mass production of electric battery cells (advanced lithium-ion) will push through by late 2025.
The construction of the factories will reportedly kick off as early as next year.
In line with the new credit tax rules, the companies which will invest in the battery factories across North America should comply with the requirements under the Inflation Reduction Act and United States-Mexico-Canada Agreement.
Having said that, the car manufacturers will be required to assemble the vehicles in the US to qualify for the $7,500-per-vehicle tax credit.
However, the new changes have sparked controversy among automakers since some thought that it discriminates against those firms which have no EV plants in the country.
Possible Location of EV Battery Plants
As of writing, Honda nor LG has not yet revealed the official location for the electric vehicle battery factory. Most likely, the location of the plant could be in Ohio, the Wall Street Journal reported.
The same exact location is the future site of multi-dollar EV factories of LG and General Motors. Aside from Ohio, the two other locations include Michigan and Tennessee.
According to LG Energy Solution CEO Youngsoo Kwon, the upcoming plant will be considered "another milestone" for the tech firm.
Related Article: GM EV Mass Production 2025: Long-Term LG Chem Cathode Material, Livent's Lithium Supplies Now Secured
EV Battery Production Growth
The EV battery factory is said to be having an annual production capacity of around 40GWh. GlobalData indicated that there is a yearly increase in battery production worldwide.
In 2020, the overall capacity was just 95.3GWh. It is expected that by 2024, it will balloon to 410.5GWh.
Meanwhile, GM aims to achieve 140GWh for the four new EV battery plants in the US. Ford, on the other hand, wants to hit 129GWh for its three factories in the region.
Stellantis looks forward to setting an annual production capacity of 23GWh for its Indiana-based plant. Volkswagen wants to target 240GWh per year for its six battery manufacturing plants in Europe for the next decade.
Honda to Invest $40 Billion In Electric Cars
In a previous report by Tech Times, the Japanese automaker is expected to spend a whopping $40 billion on the development of EVs in the next few years to come.
At the same time, Honda wanted to ramp up its annual production of EVs. The company wanted to produce more than two million units every year.
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This article is owned by Tech Times
Written by Joseph Henry
