Honda is making progress towards the goal of a 100% zero-emissions lineup in North America by 2040. It’s an ambitious but achievable goal, as many of its competitors are on similar (if not accelerated) timelines.
One of Honda’s latest strategies is to invest a hefty sum in a brand new battery plant in the United States for its line of electric vehicles. This week, Honda Motor and LG Energy Solution announcement its $4.4 billion joint venture to produce lithium-ion batteries for Honda and Acura electric vehicles; it is awaiting regulatory approval. With plans to produce around two million electric vehicles a year by 2030, Honda has no time to waste.
Although the Japanese automaker hasn’t revealed the location of the new US-based plant, it stands to reason that it could innovate near one of its existing facilities in Ohio, Alabama. or Indiana. The companies plan to begin construction in early 2023 and begin mass production of advanced lithium-ion battery cells by the end of 2025. That’s a pretty quick goal, but Honda is motivated and determined, and LG’s cash injection appears to have tipped the scale.
Honda is not alone. Stellantis, the umbrella company of American auto brands Jeep, Chrysler, Dodge, Ram, Fiat and Alfa Romeo, announced in May that it was building a $2.5 billion EV battery manufacturing plant with the giant Samsung electronics. It will be located just north of Indianapolis in Kokomo, Indiana. Stellantis has pledged to sell five million battery electric vehicles per year by 2030, and they have a lot of work to do to achieve that goal.
General Motors, which is also working with LG in its battery plant in Lansing, Michigan. Ford is partnership with SK Innovation to build an EV battery lab in southeast Michigan, and Hyundai is building a gigantic $5.5 billion dedicated to electric vehicles and battery factory near Savannah, Georgia.
Meanwhile, electric vehicle maker Rivian went public last year and brought in $11.9 billion in cash, and it plans to spend $5 billion of that to expand operations in Georgia. Rivian monitors its competitors and pursues success using best practices; it makes sense that it would follow Tesla’s lead in building its own batteries.
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If there’s any doubt about the importance of keeping as much technology and development as possible in-house, take a look at what happened to automaker Henrik Fisker’s former company, Fisker Automotive. The creator of the Karma and the Revero relied on battery manufacturer A123 Systems, and when A123 went bankrupt, Fisker did the same in 2013. With his new company, Fisker Inc, Henrik Fisker did not change its position on outsourcing thanks to its “asset light”. and entrusts the manufacture of the Ocean to Magna Steyr’s carbon-neutral factory in Austria. However, he indicated that he was keeping his eyes peeled for ways to increase production in the United States.
Finding a rich dance partner like LG is a win for auto companies like Honda, all of which have big manufacturing problems to solve. Resource mining relieves some of the pain of multi-billion investment and presumably spreads the pressure. Honda Motors reads the piece and sees the huge potential of electric vehicles in North America and throws its considerable weight behind it giving it every chance to succeed.
If the last two and a half years have taught us anything about the automotive industry, it’s that plans can go wrong quickly, especially as global supply chain challenges have grown from a simple annoyance to a total obstacle in many cases.
Now if we could just solve the chip shortage problem.