Honda Acquires Ohio EV Battery Plant from LG Energy Solution for $2.9 Billion

Honda has agreed to buy out its co-owned EV battery plant in Ohio from LG Energy Solutions amid slowing demand for electric vehicles (EVs) in the US. The facility, L-H Battery Company, forms part of Honda and LG Energy's collaborative venture in the US. Honda and LG revealed in October 2022 intentions to invest up to $4.4 billion to create the "Honda EV Hub" in Ohio, reported Electrek.

Manufacturing was originally anticipated to start by the conclusion of 2025 with an annual output capacity of 40 GWh, however this was subsequently postponed until 2026. While the facility remains scheduled to begin producing EV batteries next year, it will now be entirely owned by Honda.

LG Energy Solution announced on Wednesday its intention to divest the Ohio EV battery plant to Honda. According to LG's regulatory submission, the transaction is valued at 4.22 trillion won ($2.9 billion) and includes the building and other property-related assets. It excludes the land and equipment, the South Korean battery manufacturer stated. 

The ultimate sale price may vary, LG acknowledged, though the agreement is projected to finalise on 28th February 2026.

LG indicated the decision is intended to enhance operational effectiveness. By transferring the building and assets to Honda, LG is passing on construction expenditure, representing a substantial proportion of the total investment. According to The Korea Herald, Honda and LG's joint venture will continue managing the EV battery plant through a leasing arrangement. The facility is still projected to commence production in 2026.

Honda will use the batteries to power its new purpose-built EV range, beginning with the Acura RSX next year. This will be succeeded by a new SUV and saloon, the inaugural two models from Honda's 0 Series EV portfolio. Unlike the Prologue, which utilises GM's Ultium platform, Honda's new EVs will be developed on a new dedicated architecture. Honda may additionally employ the plant for energy storage systems. The announcement follows Ford's cancellation of its EV battery supply agreement with LG Energy Solution earlier this month, worth 9.6 trillion won ($6.6 billion).

LG Energy is broadening its energy storage operations as a contingency after the Trump Administration eliminated the $7,500 EV tax credit and other initiatives designed to encourage adoption.