Korean battery materials producer Posco Future M has partnered with Japanese automaker Honda Motor to create a joint venture focused on producing cathode materials for electric vehicle batteries in the Canadian province of Ontario to bolster the supply chain for electric vehicles in North America.

Under the agreement signed Thursday, the joint venture will supply cathode materials directly to Honda for use in the production of electric vehicle batteries across the continent. They plan to finalize the contract within this year.

The partnership between Posco Group and Honda was first announced in April last year, marking a commitment to collaborate on essential battery components such as cathode and anode materials, as well as next-generation battery technologies. Discussions since then have emphasized the importance of a locally based production of cathode materials in North America, aiming to enhance both the performance and cost-efficiency of batteries.

By leveraging Posco Future M’s expertise in high-quality battery materials alongside Honda’s advanced automotive technologies, the venture aims to deliver electric vehicles with higher-end performance and reliability to North American consumers. This move not only provides Posco Future M with a significant expansion of its customer base but also strengthens its ties with Honda, which plans to establish a production capability of over 2 million electric vehicles annually by 2030.

Posco Future M is the first Korean battery material company to enter into a joint venture with a carmaker in North America. In July 2022, the company launched another joint venture, Ultium CAM, in Quebec in partnership with General Motors to specialize in cathode active materials. The construction of this joint plant is anticipated to be completed in the latter half of this year.