LG Energy Solution aims to sell the building of its joint-venture plant for electric vehicle batteries in the US state of Ohio to its partner Honda. Although production under the joint venture’s management is still set to start there as planned, LG Energy Solution wants to reduce its capital burden through the multi-billion transaction.
According to The Korea Herald, the sale is set to bring the South Korean battery group 4.2 trillion won (around €2.5 billion). Citing official documents submitted to the relevant regulatory authorities, the newspaper reports that LG Energy Solution is selling the plant building near Jeffersonville in Fayette County and ‘all building-related facilities of the joint venture L-H Battery Company — excluding the land and equipment’ to Honda USA. The transaction is scheduled to be completed on 28 February.
The joint venture will then continue to use the facility under a lease agreement, with The Korea Herald reporting that nothing will change in the production or operating plans themselves: the manufacture of EV batteries for Honda’s North American electric vehicle models is set to begin this year, ‘with the possibility of expanding production to energy storage system applications,’ according to the report. The reason given for the partial sale is LG Energy Solution’s intention to reduce its capital commitments, above all because the global ramp-up of e-mobility is not progressing as quickly as was assumed a few years ago. The company itself stated that the divestment is part of its strategy to deal with growing planning uncertainty.
The South Korean battery maker is not planning to dissolve the joint venture or reduce its stake, but plans to sell the assets to better operate the factory, a person familiar with the matter said, adding production is expected to begin next year. “Honda’s acquisition of the building assets has enabled Honda to commit to batteries over the long term, allowing us to flexibly respond to batteries, not only for electric vehicles, but also hybrid vehicles,” a Honda spokesperson told Reuters.
Honda and LG Energy Solution broke ground on the new plant in Ohio in 2023, shortly after they had founded the joint venture L-H Battery Company. At the start of construction, the duo announced an annual production capacity of around 40 GWh. Both sides had already declared their intention to build the plant in August 2022. At the time, they said the partners would invest a total of 4.4 billion US dollars in the plant and supply the pouch cells rolling off the line exclusively to Honda plants in North America. The electric models from Honda and the carmaker’s Acura brand that came onto the market before 2026 are known to still use General Motors’ Ultium platform.
The decision comes a week after LGES said Ford Motor terminated an EV battery supply deal worth about 9.6 trillion won. Ford said it would take a $19.5 billion writedown and scrap several electric-vehicle models, a dramatic example of the auto industry’s retreat from battery-powered models in response to the Trump administration’s policies and weakening EV demand. Meanwhile, battery maker SK On ended its joint venture with Ford in the U.S. this month and other South Korean companies have repurposed production lines to produce batteries for energy storage systems for facilities such as data centers.
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