LG Energy Solution unit to sell US$2.86 billion US factory assets to Honda

[SEOUL] South Korea’s LG Energy Solution (LGES) said on Wednesday (Dec 24) that its unit is selling a factory building and assets to Honda Development and Manufacturing of America.

It is valued at US$2.86 billion, and located in the US state of Ohio.

The planned deal excludes land and equipment, and is meant to “improve joint venture operational efficiency”, the company said in a regulatory filing.

In 2022, Honda Motor and LGES announced Ohio as the site of their planned US$4.4 billion joint-venture battery plant.

The South Korean battery maker is not planning to dissolve the battery factory joint venture or reduce its stake, but plans to sell the assets to better operate the factory, a person familiar with the matter said.

The person added that production at the joint plant is expected to begin in 2026.

“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 (EVs), but also hybrid vehicles,” said a Honda spokesperson.

The decision comes a week after LGES said Ford Motor terminated an EV battery supply deal worth about 9.6 trillion won (S$8.5 billion).

Last week, Ford said it would take a US$19.5 billion writedown and scrap several EV 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.

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Amid slowing EV demand, battery maker SK On ended its joint venture with Ford in the US in December, and other South Korean companies have repurposed production lines to produce batteries for energy storage systems, for facilities such as data centres. REUTERS