Honda to invest more than $4 billion in Ohio for EV, battery production

Honda Motor Co. on Tuesday announced two major investments tied to electric-vehicle and battery production in Ohio, marking the latest move by a global automaker to advance its electrification strategy amid tightening government policies and growing consumer demand.

The Japanese automaker will invest $700 million to retool several assembly and powertrain plants in Ohio for production of EVs. And with joint-venture partner and South Korean battery maker LG Energy Solution, Honda will spend $3.5 billion to build a battery plant. The companies revealed Tuesday that the previously-announced plant will be built in Ohio's Fayette County, about 40 miles southwest of state capital Columbus, near I-71 and U.S. Route 35.

The investments mark an expansion of Honda's long-standing presence in Ohio, home to its Marysville Auto Plant, East Liberty Auto Plant and Anna Engine Plant. The $700 million outlay will be used to convert those three facilities for EV production. The plan is slated to create more than 300 new jobs, according to the company.

Honda makes products including the Accord, CR-V and Acura Integra in Ohio.

The joint-venture battery plant is expected to employ 2,200 people. It will produce pouch-type lithium-ion batteries for Honda's EVs. Pending regulatory approvals, Honda and LGES expect to formally establish the JV later this year.

Workers at Anna will produce battery cases. Then on a sub-assembly line at Marysville, workers will combine those cases with the JV plant-assembled battery modules. The battery units then will be installed into electric vehicles built at both Marysville and East Liberty.

"This is a very challenging time for our entire industry, but also a very exciting time as Honda invests in full electric vehicle production in the Buckeye State," Bob Nelson, executive vice president of American Honda Motor Co. Inc., said in a statement. "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."

John Weidner, an expert in alternative energy and dean of the University of Cincinnati's College of Engineering and Applied Science, said in a statement Tuesday that the battery plant will add fuel to Ohio's high-tech economy.

"It's absolutely huge," he said.

Ohio is among the states attracting a growing amount of investment tied to electric and digitally-connected vehicles. Intel Corp. broke ground last month on the first of two new semiconductor fabrication plants outside of Columbus as part of a $20 billion investment in Ohio. Nelson said Honda is in discussions with the state of Ohio about economic incentives tied to the investments.

Honda plans to start selling EVs built on its new Honda e:Architecture platform in North America in 2026. The company aims to be carbon neutral by 2050 and has said it aims for battery-electric and fuel cell electric vehicles to make up 100% of its sales in North America by 2040.

Nelson said Honda expects to continue production of internal combustion engine vehicles and other powertrain options besides battery electric and fuel cell electric vehicles for years to come as the automaker works toward the 2040 target, saying the transition will take time.

The company did not offer further details Tuesday about the EVs it will build at the Ohio plants and Nelson declined to comment on targeted EV production volumes.

Separately, Honda has an alliance with General Motors Co. (which also has a joint venture for battery production with LGES) under which the two automakers have agreed to work together on EVs and other initiatives.

Earlier this year, the companies said they were expanding their partnership to make a series of affordable EVs together on a new vehicle architecture that will use GM's next-generation Ultium battery technology. GM previously agreed to develop two new EVs for Honda on its electric platform and with Ultium batteries. One of those vehicles will be the Honda Prologue, coming in 2024.

Meanwhile, Honda and LGES said construction on the battery plant is slated to start in early 2023, with the companies aiming to complete it by the end of 2024. Mass production of the battery modules is expected to begin by the end of 2025. The plant will reach an annual production capacity of 40 gigawatt hours.

Asked about the role of the Inflation Reduction Act's provisions incentivizing localized production of EVs and their components, Nelson told reporters Honda started planning the EV and battery announcements "well before the IRA," which President Joe Biden signed in August.

"We do recognize the Inflation Reduction Act has some opportunities that we need to look at," he said, "but it wasn’t driven by that.”

Honda began building products in North America in 1979, when it started making motorcycles in Marysville. It launched auto production at the Marysville plant in 1982.

“Honda is proud of our history in Ohio, where our U.S. manufacturing operations began morethan four decades ago," said Nelson. "Now, as we expand Honda’s partnership with Ohio, we are investing in aworkforce that will create the power source for our future Honda and Acura electric vehicles."

jgrzelewski@detroitnews.com

Twitter: @JGrzelewski