Joe Biden can’t claim all the credit for the US battery factory news last week from Honda, LG Energy Solution and Panasonic. Plans for these new facilities were probably well advanced before the Inflation Reduction Act was signed. But the timing of the announcements so soon after the new legislation came into effect also cannot be entirely a coincidence.

Honda and LGES 40 GWh battery plant

In a joint August 29 press release, Honda and LG Energy Solution announced that they had reached an agreement to create a joint venture that will manufacture lithium-ion batteries in America to power Honda and Acura electric vehicles for the Northeast market. American. The site for the new plant has yet to be determined, but it will cost $4.4 billion and have an annual production capacity of around 40 GWh.

Pocket-type batteries produced at the new plant will be supplied exclusively to Honda facilities in North America. Construction is expected to begin early next year with full production expected by the end of 2025.

“Our joint venture with Honda, which enjoys an important brand reputation, is another important step in our medium to long-term strategy to promote electrification in the rapidly growing North American market,” said Youngsoo Kwon. , CEO of LG Energy Solutions. “As our ultimate goal is to earn the trust and respect of our valued customers, we aspire to position ourselves as a leading battery innovator, working with Honda in delivering its key electrification initiatives, as well as only by providing sustainable energy solutions to demanding end consumers.”

Honda CEO Toshihiro Mibe said: “Honda is working towards our goal of achieving carbon neutrality for all products and corporate activities in which the company is involved by 2050. In line with our long-standing commitment To manufacture products close to the customer, Honda is committed to the local supply of EV batteries, which is an essential element of EVs. This initiative in the United States with LGES, the world’s leading battery manufacturer, will be part of such a Honda approach.

According Automotive News Europe, Honda plans to build about 800,000 electric vehicles in North America by 2030, which means that 40-50% of its sales in this market will be electric vehicles. Honda will invest more than $36 billion over the next 10 years to electrify its cars and improve vehicle software. It plans to introduce 30 battery-electric models globally and produce 2 million electric vehicles per year by 2030.

Featured image courtesy of Acura.

Honda plans to sell 70,000 Honda Prologue crossover SUVs by 2024. This car will be built in Spring Hill, Tennessee, on a platform developed by General Motors. This month, the Acura brand teased the Precision EV concept, saying it will be called the ZDX. This car will most likely also be built in Tennessee and is expected in 2024. It’s probably no coincidence that LGES is also GM’s battery supplier. Honda announces that it will introduce its own electric vehicles for the 2026 model year.

Panasonic chooses Oklahoma for its fourth battery factory in the United States

Based on a report from the wall street journal, Reuters says Panasonic has chosen Oklahoma as the site for its fourth US battery plant. The plant will cost around $4 billion and employ up to 4,000 workers, sources say. A Panasonic spokesperson said only: “We are reviewing various growth strategies for our automotive battery business, but there is no other information we can share at this time beyond what we already have. announcement.”

Last month, the company announced it would build its third US battery plant in Kansas. The Oklahoma plant will be closer to the new Tesla Gigafactory in Austin, Texas. Panasonic has partnered with Tesla for more than a decade, supplying it with batteries from its Nevada factory.

The Oklahoma government has reportedly offered an incentive package of up to $698 million to attract an unidentified company that will invest a minimum of $3.6 billion and create at least 4,000 new jobs within five years. It appears that the unidentified company is Panasonic.

The battery materials conundrum

The new federal law will require electric car batteries to be manufactured in the United States in order to qualify for federal tax credits. But those batteries will also have to be made from materials that come from the United States or a country with which the United States has a free trade agreement. China is not one of these countries, but it controls most of the battery material supply chain in the world.

South Korea’s battery makers – LG Energy Solutions, SK On and Samsung SDI – together make about a quarter of all electric vehicle batteries globally. Unsurprisingly, most of the precursor materials for all of these batteries come from China. The new federal law has prompted these companies to seek new sources of supply.

According Reuters, a delegation from South Korea will soon travel to the United States to ask the US government to delay the new battery material rule to give these companies more time to comply. Part of the concern is that it will take a long time to verify where all the components and minerals came from, let alone make changes to the supply. “We don’t have many options but to ask the US to ease the rules on battery components and minerals and delay actual implementation,” an unnamed source said.

The delegation is expected to tell officials from the U.S. Trade Representative’s office and the U.S. Treasury that the new law could violate trade norms such as the U.S.-South Korea Free Trade Agreement and the the WTO, according to sources in the South Korean government.

Battery manufacturers are now struggling to find new sources of battery materials, but it won’t be easy, as currently 58% of lithium, 64% of cobalt and 70% of graphite come from from China. As demand for electric cars escalates, finding alternative sources in times of supply shortages will be difficult, to say the least.

Panasonic may be a Japanese company, but it will face the same battery material sourcing issues as every other battery maker that wants to be part of the electric vehicle revolution in the United States. Policies have consequences, and one of those consequences is a scramble among battery manufacturers to reduce their dependence on battery materials supplied by China. It won’t happen overnight and the cost of electric cars is unlikely to drop anytime soon either. There is a bumpy road ahead for the industry. It’s time to tie up.


Do you appreciate CleanTechnica’s originality and cleantech news coverage? Consider becoming a CleanTechnica Member, Supporter, Technician, or Ambassador – or a patron on Patreon.

Don’t want to miss a cleantech story? Sign up to receive daily updates from CleanTechnica via email. Or follow us on Google News!

Have a tip for CleanTechnica, want to advertise or suggest a guest for our CleanTech Talk podcast? Contact us here.



smart power: ABB India expands and modernizes the Smart Power plant in Nelamangala, Bengaluru


ABB India, a major power player, upgrades its "Smart Factory" in Bangalore

Check Also