LG Energy Solution and Honda have completed the establishment of a joint venture to build a battery manufacturing plant in the US, officials announced Friday.
The joint venture, tentatively named L-H Battery Company, marks the first collaboration between a South Korean battery maker and a Japanese automaker. Friday’s official announcement was a follow-up to the two companies’ previous agreement in August.
According to the announcement, the two companies will invest a total of $4.4 billion (5.46 trillion won) in the new battery facility, which will be constructed near Jeffersonville, Ohio. Upon completion, the battery plant will have a total production capacity of 40 gigawatt-hours per year, enough to power 500,000 electric vehicles.
The companies said the construction of the battery facility will begin next month and it is expected to be completed by the end of 2024. The two sides have set the target to begin producing batteries at the Ohio site by the end of 2025. Officials said the batteries produced there will be exclusively supplied to Honda factories in North America. Honda operates 12 plants in the US with three of the vehicle assembly factories in Ohio.
L-H Battery Company’s new battery factory is expected to create about 2,200 new jobs in the area.
LG Energy Solution will have 51 percent of the joint venture’s total share while Honda will own 49 percent, according to officials. Lee Hyuk-jae, head of the North American region at LG Energy Solution, will take the role of CEO at L-H Battery Company. Rick Riggle, a leader at Honda’s Anna Engine Plant in Ohio, will become the joint venture’s chief operating officer.
“LG Energy Solution has distinguished investment capabilities as well as proven competitiveness in global production and quality,” said Lee. “We will supply the best quality batteries for a successful launch of Honda EVs in North America and create quality jobs in order to grow together with the regional society of the state of Ohio.”
According to market analysis SNE Research, LG Energy Solution had the second-highest battery-producing capacity with 140GWh in 2021, behind China’s CATL with 161GWh. The Korean battery maker has set out the goal of achieving 540GWh in worldwide production capacity by 2025.