SEOUL (Reuters) – South Korean battery maker LG Energy Solution (LGES) plans to build a battery joint venture (JV) with Japan’s Honda Motor Co Ltd in the United States, South Korea’s Maeil Business Newspaper said on Friday, citing an unnamed industry source.
The potential battery JV between LGES and Honda could cost as much as 4 trillion won ($3.4 billion) and have an annual production capacity of up to 40 gigawatt hours (GWh) of batteries, enough to power 600,000 electric vehicles (EVs), the newspaper reported. The report did not have details, such as the timeline of when the JV would be built and begin operations.
LGES, LG Chem Ltd’s battery subsidiary, commands more than 20% of the global EV battery market and supplies Tesla Inc, General Motors Co and Volkswagen AG among others.
“We are discussing various ways to cooperate with automakers, including establishing joint ventures, but nothing has been decided,” LGES said in a statement.
A Honda USA spokeswoman declined to comment on the story.
“This is not something that Honda has announced. We cannot comment on speculation,” said a spokesperson at Honda in Tokyo.
Honda and its alliance partner GM plan to introduce two jointly developed large-sized EV models in North America, using GM’s Ultium batteries, in 2024. GM will make Ultium batteries under a JV with LG.
Honda Motor’s chief executive, Toshihiro Mibe, said last year the Japanese automaker was willing to form new alliances to make electrification profitable.
LGES, which has battery production sites in the United States, China, South Korea, Poland and Indonesia, plans to invest a total of 5.6 trillion won in North America by 2024 to secure production capacity of over 160 GWh by 2025 in the region, according to a company filing.
That includes two new U.S. plants jointly built with GM in Ohio and Tennessee as well as a battery joint venture with Stellantis NV.
($1 = 1,186.11 won)
(Reporting by Heekyong Yang, Hyunjoo Jin in San Francisco and Tim Kelly in Tokyo; Editing by Karishma Singh and Christopher Cushing)