Honda to buy LG battery assets in Ohio for $2.9 billion

Honda Motor Co. will buy out LG Energy Solution Ltd.’s facilities and other assets from their joint battery plant in Ohio for about 4.2 trillion won ($2.9 billion) as America’s pullback in electric vehicles continues to ripple across the industry’s supply chain.

The sale — to a Honda unit in the US — is scheduled to be finalized by the end of February, Seoul-based LG said in a regulatory filing on Wednesday. LG said the move would improve operational efficiency.

With the transition toward EVs outside of China unraveling, the outlook for South Korean battery makers is deteriorating. Ford Motor Co. recently rolled back its EV ambitions, scrapping a 9.6 trillion won battery agreement with LG and breaking up a US venture with Korea’s SK Innovation Co. in the process.

Honda and LG Energy announced a $4.4 billion investment plan in 2022 to build EV batteries in Ohio, with mass production slated to start at the end of 2025.

Separately, US immigration agents carried out an unprecedented raid on LG’s Georgia venture with Korean partner Hyundai Motor Co., detaining more than 300 South Korean workers.

LG Energy is building two other production lines in Arizona and Michigan, and has been ramping up its energy storage business to cushion the impact from its recent setbacks.