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Honda ups EV ante with $4.2 billion Ohio battery and plant investment

Posted By: Toledo Blade on October 11, 2022.  For more information, please click here to read the source article.

Honda is staying home in Ohio with a new $4.2 billion investment for EV production and a giant, joint venture battery plant in Fayette County, 40 miles southwest of Columbus, the company announced today.

The announcement in Columbus comes 45 years after Honda said it would plant roots in Marysville to build motorcycles, then cars, for the American market.

The planned investment is for $700 million to convert part of Honda’s Ohio car-making plants for EV production and $3.5 billion to build a lithium-ion battery plant outside of Columbus with the world’s leading EV battery maker, LG Energy Solution.

The investment in the battery plant could eventually reach $4.4 billion, said Bob Nelson, executive vice president of American Honda Motor Co.

The battery plant is expected to employ about 2,200 workers, Mr. Nelson said. Another 300 jobs will be created from modifications for EV production to Honda’s Marysville Auto Plant, East Liberty Auto Plant, and Anna Engine Plant.

Mr. Nelson said Honda is in discussions with the State of Ohio for an incentive package for the project but declined to comment further.

The commitment signifies that Ohio will remain the carmaker’s manufacturing hub decades into the future, Mr. Nelson said.

“Honda has built hybrid-electric vehicles in Ohio for a number of years, and the experience and expertise of our associates in manufacturing, product development, and purchasing will serve as an important foundation as we transition to the electrified future,” he said.

Honda investigated thoroughly Fayette County for the new battery plant, particularly its proximity to its Ohio manufacturing hub and the quality and scope of the local workforce, Mr. Nelson said.

Honda’s Ohio plants currently are non-union despite past efforts by the UAW to organize them.

Like other automakers, Honda is planning an aggressive transition to EVs from traditional gasoline-powered vehicles over the next two decades.

Honda has set its sights on producing a 100-percent emission-free U.S. fleet of vehicles by 2040, with 40 percent EV by 2030 and 80 percent by 2035, Mr. Nelson said.

Gov. Mike DeWine formally announced the joint venture battery plant at a ceremony in Columbus that included remarks from several dignitaries, including U.S. Sen. Sherrod Brown (D., Ohio), U.S. Energy Secretary Jennifer Granholm, and Lt. Gov. Jon Husted.

In a video message, Honda’s Global CEO Toshihiro Mibe thanked Mr. DeWine and Ohio leaders for partnering with Honda again to promote the next generation of mobility through electric vehicles.

“Today we take an important step for the next 40 years in Ohio,” he said.

That sentiment was echoed by LG’s Sukwon Choi, senior vice president and group leader of North American production, who said Honda and LG “expect to grow together” to help make Ohio a hub for North American EV production.

Mr. DeWine, who is seeking a second term as governor this year, said one of the first things he did after being sworn in as governor in 2019 was visit Honda executives in Tokyo to meet decision-makers and understand what their needs were in Ohio.

He said the bond between Ohio and Honda will only grow stronger as the automaker invests in the state for a fast-developing EV future.

For many years to come, Honda’s EVs will be built alongside the carmaker’s gasoline-powered and hybrid fleet in Marysville and the other Ohio plants.

Honda expects to use all of the batteries produced at the new plant for its own Honda and Acura-branded vehicles, he said.

Construction of the battery plant will begin in early 2023, with completion by the end of 2024. Production of advanced battery modules would begin by the end of 2025.

Honda said it will be located near I-71 and U.S. Route 35.

In LG Energy Solution, Honda has chosen to partner with the same battery maker as General Motors in the former Lordstown Assembly Plant in Warren, Ohio.

That $2.3 billion joint venture, producing Ultium Cells, has started production for GM-brand EVs.

Of the nearly 1.5 million vehicles that Honda sold in the United States last year, about 100,000 were hybrid electrics that allow drivers to switch between electric power and a gasoline-powered engine.

The 100,000 sold was a record for Honda. The models using hybrid electric included the Accord, CR-V, and Insight sedan.

On the horizon is the all-electric Prologue electrified SUV, expected to come to the North American market in 2024.

The Prologue was co-developed with GM and will use a GM battery.

Honda said last week that it will begin rolling out Honda models using its own electric architecture in 2026.

Today’s Honda news follows GM’s big announcement less than three weeks ago that it was investing $760 million in its Toledo Propulsion Systems plant, formerly Toledo Transmission, for EV production.

The plant is being gradually converted from making transmissions for gasoline-powered vehicles to the production of EV drives to power the vehicles.

Like at the Honda plants, that transition will mean traditional transmissions will be made under the same roof as EV drives for several years. The new product is expected to preserve about 1,500 jobs at the plant located at 1455 Alexis.

As part of Honda’s planned $700 million re-tooling of its Ohio plants for EVs, the Anna Engine Plant is slated to produce the battery case for the battery modules that will ultimately be installed in EVs at Honda’s two Ohio assembly plants.

Senator Brown said those investments, combined with a planned $20 billion investment by Intel to build two computer chip factories outside of Columbus, are changing Ohio’s national image to that of a technology center.

“This year we have finally buried the term Rust Belt,” he said.