Honda Buys Out LG Energy EV Battery Plant in Ohio

Honda has agreed to purchase its co-owned electric vehicle battery plant in Ohio from LG Energy Solutions for nearly $3 billion. The acquisition grants Honda full control over the facility as the company prepares for an upcoming all-new dedicated vehicle lineup.

This transaction represents a significant step in Honda's strategy to secure its battery supply chain. By taking full ownership, Honda ensures direct oversight of battery production capabilities essential for its future electric vehicles. The move aligns with broader industry trends where automakers are increasingly bringing battery manufacturing in-house rather than relying solely on third-party partnerships.

The agreement marks a major shift in Honda's supply chain strategy. By acquiring the remaining stake from LG Energy Solutions, the automaker secures complete operational control over the battery manufacturing facility located in Ohio. This facility was originally established as a joint venture between the two companies.

The nearly $3 billion investment demonstrates Honda's commitment to electrification. Securing domestic battery production capacity is crucial for meeting production targets and potentially qualifying for federal incentives related to electric vehicle manufacturing. The Ohio plant will serve as a critical hub for supplying batteries to Honda's North American vehicle assembly lines.

The acquisition is directly linked to Honda's plans to launch an all-new dedicated lineup of electric vehicles. Controlling the battery supply chain allows for better cost management and quality assurance as the company transitions away from internal combustion engines. This vertical integration strategy is becoming standard practice among legacy automakers entering the EV space.

Key benefits of this ownership transfer include:

• Enhanced control over battery technology and specifications
• Improved supply chain stability and security
• Greater ability to scale production based on demand
• Direct oversight of manufacturing processes and efficiency

This deal reflects the intense competition within the electric vehicle market. Automakers are racing to secure raw materials and manufacturing capacity for batteries, which represent the most expensive component of an EV. Honda's move to buy out its partner suggests a desire to accelerate its EV roadmap without shared decision-making delays.

The transaction also highlights the evolving relationship between traditional car manufacturers and battery specialists like LG Energy Solutions. While the two companies are separating ownership of this specific plant, they may continue to collaborate on technology development or supply agreements in other areas. The Ohio facility will now operate solely under Honda's management.

Honda's acquisition of the Ohio battery plant from LG Energy Solutions is a pivotal moment in its corporate history. The nearly $3 billion expenditure underscores the high stakes involved in the transition to electric mobility. As Honda prepares to roll out its next generation of vehicles, this facility will likely play a central role in its manufacturing ecosystem. The company now possesses the infrastructure needed to support its ambitious electrification goals, positioning itself for a competitive future in the automotive landscape.