Honda finally revealed the location of its new electric vehicle plant -- Ohio is where the Japanese auto maker and LG Energy Solution will invest $4.4 billion to manufacture batteries for its new models.
The company is the latest entrant to the rising competition and said on Oct. 11 that its lithium-ion battery factory would be located in Fayette County, Ohio, about 40 miles southwest of Columbus.
The two companies plan to invest $3.5 billion initially and hire 2,200 employees in the joint venture, but plans to spend a total of $4.4 billion overall.
Honda Motor HMC said on Aug. 29 that it would construct a lithium-ion battery factory with LG Energy Solutions, but did not reveal the location.
The automaker also plans to spend more capital to retool three plants in Ohio at a cost of $700 million, plus hire 300 new employees to ramp up more production of EVs.
Construction at the new factory will start early next year and is anticipated to be completed by the end of 2024. The goal of the plant is to start mass production of pouch-type lithium-ion batteries by the end of 2025.
Production of EVs is expected to start in the U.S. by 2026, the company said.
Battery cases will be produced at Honda's Anna, Ohio engine plant. Those cases will be combined with battery modules from the joint venture, which will be placed into EVs built at two other plants in Ohio.
Automakers are shifting rapidly to producing more models of EVs and the batteries to power them as legislation throughout the U.S. seeks to ban gasoline-powered cars.
EV makers have sought to gain traction in the U.S. as more of them invest billions of dollars into constructing their own battery plants.
As EVs are popular among consumers, auto makers continue to make large multi-year investments into battery plants to also control their supply chains.
Legislators, including California Gov. Gavin Newsom, have sought to ban gasoline-powered cars. The California Air Resources board approved regulations on Aug. 25 that halt the sale of new gas-engine cars in 2035. California makes up about one-third of the auto market in the U.S. currently.
The push to eliminate the sale of internal-combustion-engine vehicles is also gaining strength as several states have said they plan to adopt California's stricter rules on car emissions.
Several states, including Oregon, Massachusetts, Washington, and New York, have adopted similar zero-emission vehicle standards.
Honda's New Ohio Battery Plant
Honda said the new plant in Ohio will have production capacity of about 40GWh each year.
Honda currently has an Marysville, Ohio auto plant, built in 1982, that produces the Honda Accord sedan and coupe, plus the the Acura TLX and ILX, for customers in more than 100 countries.
The car maker entered the EV market later than its competitors and said more than a year ago that it planned to manufacture only EVs. By 2040, the Japanese automaker plans to switch over entirely to electric and fuel-cell vehicles.
EV Battery Plants in the U.S. Increasing
Several battery plants are being constructed in the U.S. as auto makers race to ensure they have steady supplies on hand.
General Motors GM plans to open a $2.6 billion battery plant with LG Energy Solution in Lansing, Mich.
In May, Stellantis STLA said it was creating a joint venture with Samsung SDI to build its own $2.5 billion lithium-ion battery plant.
The plant will be constructed in Kokomo, Ind., and production is estimated to start in 2025. Initial annual production capacity is 23 gigawatt hours.
In 2019, BMW (BAMXF) said it doubled its capacity to produce high-voltage batteries at its Spartanburg, S.C., plant. The batteries are used for the plug-in hybrid models of the new BMW X5 and the BMW X3.
Last year Ford F and SK Innovation, a Korean battery supplier, created a joint venture to manufacture 60 GWh annually in traction battery cells and array modules.
Ford also has three battery plants in Kentucky and Tennessee that are part of the joint venture between Ford and SK.
Panasonic (PCRFY) could invest $4 billion to build a second EV battery plant in the U.S., according to the Wall Street Journal.
The Japanese company provides batteries for Tesla TSLA and is considering building the plant in Oklahoma, sources told the WSJ.
A battery plant in Oklahoma would benefit Tesla since it has a manufacturing plant in Austin.
In July, Panasonic said it would spend $4 billion to build a battery plant in Kansas. Sources told the WSJ the two plants would be similar.
Panasonic already operates a battery factory with Tesla in Nevada.
