Honda announced today a major investment in producing electric vehicles and batteries in the US. The company is the latest automaker to take that route in order to comply with requirements linked to the new EV tax credit.
The goal is to turn Ohio into Honda’s “EV Hub.”
It doesn’t sound like the investment changes Honda’s plan to launch its first EV in the US – the Prologue – in 2024 through a partnership with GM, its first EV built from the ground up in 2026.
But now this new electric vehicle coming in 2026 is going to be produced locally.
There are two major parts to this announcement today. First, Honda is investing $700 million in three separate Ohio plants to retool for electric vehicle production:
The announcement, held 45 years to the day after Honda announced its first production facility in Ohio — October 11, 1977 — will transform Honda’s Marysville Auto Plant (MAP), East Liberty Auto Plant (ELP) and Anna Engine Plant (AEP) for the electrified future, including the creation of over 300 new jobs. Honda plans to begin production and sales of Honda EVs in North America in 2026, based on its new Honda e:Architecture. The $700 million re-tooling will enable AEP associates to produce the battery case, to be combined with the battery modules from the JV plant on a sub-assembly line at MAP, with the complete battery unit then installed in EVs built by associates at both MAP and ELP.
The second part of the announcement is a joint venture between Honda and LG Energy Solutions to build a new battery factory in Fayette County, Ohio:
Honda will obtain the battery modules from a new joint venture (JV) between Honda and LGES, subject to customary closing conditions, including regulatory approvals. That JV production facility represents a commitment to invest $3.5 billion in Fayette County, Ohio, and will employ 2,200 associates, who will produce pouch-type batteries to be provided to Honda plants for EV production.
Construction is expected to start early next year and should be completed by the end of 2024.
The goal is to establish the production of “advanced pouch- type, Li-ion cells” with a total annual capacity of 40 GWh.
Like many similar announcements we have seen in the last few months, this is likely driven by the requirements to have local EV assembly and battery production to obtain the federal tax credit for electric vehicles.
This is a significant investment from Honda, but as I discussed in my last post on their EV timeline in North America, it might still be too little too late in the case of the Japanese automaker with only two models in the US by 2026, with one of them using GM’s technology.
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