Yet Another Automaker Picks A Red State For Its Multi-Billion Dollar EV Factory

Honda and battery maker LG announced plans for a $4.4 billion electric vehicle (EV) facility Monday, likely to be located in the Republican-run state of Ohio, the latest such facility built in a Republican-run state.

Honda joins competitors, such as Hyundai and Ford, who are constructing new EV and battery facilities predominantly in Republican-run states and congressional districts, in an effort to ensure their EVs qualify for tax credits under new restrictions under the Inflation Reduction Act that require EVs to be assembled in the United States. While the companies did not publicly disclose the location, people familiar with the matter said the Honda-LG factory was planned for Ohio, where Honda already has a significant presence with an auto plant in Marysville, according to The Wall Street Journal.

The factory will be reportedly be located in Ohio’s 15th Congressional District, which has been solidly Republican for almost 30 years, excepting one-term Democratic Rep. Mary Jo Kilroy from 2009-2011, according to Ballotpedia. Republicans control the governorship and both houses of state government in Ohio, and other companies entering the EV space have been building their factories near existing factories, according to CNBC.

The plant will be similar to those being built by competitors, including a $5.5 billion Hyundai plant in Georgia and a $5.8 billion Ford plant in Kentucky, which are also targeting a production date of 2025. The batteries produced by the factory under the new venture will exclusively supply Honda, with production breaking ground in early 2023, and full production of “advanced lithium-ion battery cells” slated to begin by the end of 2025, according to Honda’s press release.

Honda committed to spending about $36 billion dollars on the development of 30 models of EVs by 2030, teaming up with both General Motors and Sony to develop the vehicles, according to the WSJ. Joint ventures between auto makers or between auto makers and battery makers are one way to keep costs down in the fact of rising materials costs, according to S&P Global Commodity Insights

The factory represents Honda’s first significant step in constructing its own supply chain for batteries and EV components since it announced plans a year ago to convert its entire fleet to EVs by 2040, the WSJ reported. Honda has yet to roll out a mass-market EV, even as other foreign car makers have begun to enter the burgeoning market.

The plant’s targeted production of 40-gigawatt-hours of batteries per year would be enough to supply more than 700,000 vehicles annually, according to the WSJ, citing the International Energy Agency’s estimates for the average battery capacity of an EV.

LG also has joint ventures with Hyundai, General Motors, and Stellantis, who owns Jeep and Dodge among other well-known American brands.

“The key challenge in the EV era is the global procurement of batteries,” said Honda Senior Managing Executive Officer Shinji Aoyama in April, according to the WSJ. He hoped that Honda would be able to independently produce batteries by the end of the decade, which he thinks will be “the dawn of the popularization of EVs.”

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