On Tuesday, Honda said it is spending $700 million to retool three of its Ohio plants to produce electric vehicles as it aims to phase out gas engines by 2040.
Batteries for Honda’s electric vehicles and its Acura division will be provided by a joint venture with LG Energy Solutions. The automaker confirmed that the $4.4 billion battery plant will be located near Honda operations in Fayette County, Ohio, pending regulatory approval.
“New EV Center” will leverage Honda’s manufacturing and purchasing network in Central Ohio, the symbol of an industry-wide scramble to bring battery production to shore to control the supply and access of new battery technologies.
To date, automakers and suppliers have announced over $38 billion in investments by 2026 to boost battery production in the US, according to AlixPartners. That number is likely to grow as the industry takes advantage of a $40 billion tax credit in the Inflation Reduction Act to accelerate production of electric vehicles.
Last month, Ford broke BlueOval City complex worth $5.6 billion in Tennessee, where it plans to begin building advanced batteries for future Ford and Lincoln EVs, including the F-150 Lightning and a second battery-powered pickup, in 2025.
Toyota plan to spend $3.8 billion to build a battery plant near Greensboro, North Carolina, for hybrid and battery-powered vehicles by mid-decade. Panasonic, which supplies Tesla and other automakers, has committed to creating a $4 billion battery factory in Kansas — the state’s largest-ever economic development project — and is in talks for another $4 billion plant in Oklahoma.
Honda and LG Energy aim to start construction early next year and mass produce advanced lithium-ion battery cells by the end of 2025. The joint venture has committed an initial investment of $3.5 billion, totaling a total of $3.5 billion. Investment capital is expected to reach $4.4 billion.
Honda plans to ramp up production to sell millions of EVs in North America, a far cry from the 100,000 EVs and hybrids it sold in the US last year, primarily the Accord Hybrid and CR-V Hybrid. The company plans to launch The first battery-powered SUV, Prologuein 2024, is currently co-developing vehicles based on General Motors’ Ultium platform but plans to begin production of vehicles based on the new Honda e: Architecture in 2026.
Honda’s $700 million retooling of its existing Ohio plant will help move its Anna Engine Plant to build vehicle battery boxes, Marysville Auto Plant to incorporate battery modules and East Liberty Automobile Factory to install the battery unit.