Seoul 29 Aug : LG Energy Solution announced on Monday that it will be working with the Japanese firm Honda Motor to build an electric vehicle battery plant in the United States in the latest move to boost its production capacity in response to the growing demand for zero-emission vehicles. The two firms signed a legally binding contract of the 5.1 trillion-won ($4.4 billion) joint venture to construct the facility for production with the capacity of 40 gigawatts, LGES said in a announcement.
LGES will invest an initial amount of $1.8 billion in the joint venture, and more in the years to come, up to 2027, the company said in the regulatory filing.LGES will own 51 percent of the stake in the joint venture company.
The signing ceremony was held in Seoul early in the day.It was which was attended by LGES CEO Kwon Young-soo as well as Honda Motor CEO Toshihiro Mibe according to Yonhap news agency.
The site of the plant is yet to be determined.
The plant will produce pouch battery cells and modules from in 2025.The product of the plant will primarily be used for Honda’s top Acura electric vehicles, LGES said.
LGES is the second largest battery manufacturer is investing in over 20 trillion won in order to increase its capacity of production in North America.It has created joint ventures with U.S.General Motors Co.and the Chrysler parent company, Stellantis N.V., to produce and distribute electric vehicle batteries.
LGES is also seeking to expand its standalone facility in the U.S.state of Michigan and is weighing the possibility of building a second cylindrical battery plant in Arizona after it said it was considering reevaluating the possibility due to increasing costs.
Honda, the sixth-highest-selling automobile manufacturer in North America, has revealed a plan to spend 5 trillion yen ($40 billion) in electrification with the goal of selling more than 2 million EVs by 2030.
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