Japanese carmaker Honda and South Korean battery maker LG Energy Solution will invest $4.4 billion (€4.4 billion) to build a new battery plant in the US, amid increasing pressure from Washington to cut China out of supply chains for electric vehicles.
It will be the first manufacturing facility for EV batteries in the US for Honda, which has committed to ending fossil-fuelled vehicles by 2040.
The slew of recent investment deals in the US by Asian carmakers and battery manufacturers comes as the US tightens environmental regulations, with California last week enacting rules that halt sales of new petrol-powered vehicles by 2035.
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Companies are also being attracted by the prospect of generous US subsidies for local production of sensitive technologies including chips and batteries.
Along with fellow leading battery makers SK On and Samsung SDI, LG Energy Solution is expected to be one of the main beneficiaries of the US Inflation Reduction Act, which was signed into law by President Joe Biden earlier this month. The landmark legislation is designed to eliminate from the US supply chain battery components coming from “foreign entities of concern”, most notably China.
South Korea’s three leading battery companies enjoy more than a quarter of the global market share, according to SNE Research, and are pushing into the US market. — Copyright The Financial Times Limited 2022
