LG Energy Solution (LGES) and Honda Motor Co. on Aug. 29 announced an agreement to establish a joint venture (JV) company to produce lithium-ion batteries in the U.S. to power Honda and Acura EV models for the North American market.
With this agreement, LGES and Honda will invest a total of $4.4 billion and establish a new JV plant in the U.S. The plant aims to have an annual production capacity of approximately 40GWh.
The pouch-type batteries produced at the new JV plant will be supplied exclusively to Honda facilities in North America.
While the location for the joint venture plant is yet to be finalized, based on Honda’s plans for EV production in North America, the two companies aim to begin construction in early 2023, in order to enable the start of mass production of advanced lithium-ion battery cells by the end of 2025.
LGES and Honda made the decision to establish the JV battery plant based on the shared belief that expanding local electric vehicle production and ensuring the timely supply of batteries would put them in the best position to target the rapidly growing North American EV market.
“Our joint venture with Honda, which has significant brand reputation, is yet another milestone in our mid- to long-term strategy of promoting electrification in the fast-growing North American market,” said Kwon Young-soo, CEO of LG Energy Solution.
“Since our ultimate goal is to earn our valued customers’ trust and respect, we aspire to position ourselves as a leading battery innovator, working with Honda in achieving its core initiatives for electrification, as well as providing sustainable energy solutions to discerning end consumers.”
“Honda is working toward our target to realize carbon neutrality for all products and corporate activities the company is involved in by 2050,” said Toshihiro Mibe, President, CEO and Representative Director of Honda Motor Co., Ltd.
“Aligned with our longstanding commitment to build products close to the customer, Honda is committed to the local procurement of EV batteries which is a critical component of EVs. This initiative in the U.S. with LGES, the leading global battery manufacturer, will be part of such a Honda approach.”
The joint venture is scheduled to be established in 2022. The closing is subject to customary closing conditions, including regulatory approvals.
LG Energy Solution Aims to Achieve RE100 in All Global Production Sites by 2025
LG Energy Solution announced its plan to achieve RE100 at all of its global production sites by 2025.
In its ESG Report 2021, which was published on Aug. 3, the company stated that it will complete its conversion to RE100 across all its global battery manufacturing sites (in Korea, North America, Europe, China, etc.), which means they will run entirely on renewable energy.
RE100 is the acronym for “Renewable Electricity 100%,” a global initiative for businesses to convert the 100% of their energy sources to renewable energies, such as wind and solar.
According to the RE100 2021 Annual Disclosure Report released by international non-profit, Climate Group, and the Carbon Disclosure Project (CDP), LGES global business sites’ conversion rate of renewable energy reached 33% in 2020, the highest percentage among the 14 domestic companies committed to the RE100 initiative.
The company now aims to boost its conversion rate to exceed 60% by the end of this year.
LGES also announced a specific roadmap to successfully complete this mid- to long-term initiative and realize carbon neutrality, which centers around the previously mentioned goal for RE100.
The company first plans to achieve RE100 at every global production plant by 2025, with its non-manufacturing business sites, such as R&D centers, to follow by 2030.
By 2040, LGES intends to implement the reinforced version of carbon neutrality, which entails converting all energy sources aside from electricity, including fuels and gas, to renewable energy sources.
By 2050, the company will have achieved carbon neutrality across the entire value chain, from mining resources all the way up to manufacturing the batteries, with its suppliers also achieving RE100 within their own businesses.
“We will achieve RE100 across the entire value chain by 2050 by monitoring our suppliers’ carbon emissions, endorsing their RE100 participation and encouraging their carbon reduction campaigns,” said LGES.
“After that, we will actively pursue our goal of becoming ‘Carbon Negative,’ which involves converting carbon emissions to minus values.”
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