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LG Energy Solution, Honda in talks to set up US joint venture

Honda emblem (Reuters)
Honda emblem (Reuters)
South Korean electric vehicle battery giant LG Energy Solution and Japanese automaker Honda are in talks to form a joint venture in the US in a rare partnership between Korean and Japanese companies, according to industry sources Friday.

The two companies are reportedly in the early stage of discussions to set up a 4 trillion-won ($3.3 billion) EV battery factory in the US with an annual production capacity of 40 gigawatt-hours, which is enough to power 600,000 EVs.

Details such as establishment date, location and ownership structure haven’t been decided yet but are expected to be ironed out in six months, sources said.

“Nothing has been decided yet,” a company official said, adding that the firm “has continued talks with various global automakers for possible partnerships.”

Honda’s partnership with LG Energy Solution comes as the world’s eighth-largest carmaker is gearing up for its entry to the burgeoning US EV market. Last year, Honda laid out a plan to transition 100 percent to EVs by 2040, becoming the first Japanese carmaker to seek full electrification.

As to why Honda chose LG Energy Solution over Japanese battery manufacturers such as Panasonic, sources said that Japanese companies seem to be losing competitiveness against Korean firms.

There are existing ties between the two companies. Honda plans to manufacture EVs based on General Motors’ “Ultium” platform that was developed in partnership with LG Energy Solution.

By Kim Byung-wook (kbw@heraldcorp.com)
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