Japanese automaker Honda Motor Co plans to set up a new lithium-ion battery plant for electric vehicles in the United States with Korean battery supplier LG Energy Solution Ltd, the Nikkei business daily reported on Monday.
Battery makers are looking to increase production in the U.S. where a shift toward electric vehicles (EV) could increase as the country implements stricter regulation and tightens tax credit eligibility.
The investment is expected to be on a scale of several hundred billion yen, the report added.
Both Honda and LG Energy Solution declined to comment when contacted by Reuters.
The U.S. government has been pushing policies designed to bring more battery and EV manufacturing into the country.
President Joe Biden signed a $430 billion climate, health care and tax bill this month that would render electric vehicles assembled outside North America ineligible for tax credits.
California announced a plan last week requiring all new vehicles sold in the state by 2035 to be either electric or plug-in electric hybrids.
Honda and LG Energy Solution will establish a joint venture to start producing lithium-ion batteries in Ohio, where Honda's main factory is located, according to the report, adding they are aiming to start construction in 2023 and mass-production in 2025.
LG Energy Solution, which is mainly engaged in the development of lithium-ion battery materials and next-generation batteries, also supplies EV batteries and signed joint-venture agreements with General Motors, Hyundai Motor Co and Stellantis.
In July, Panasonic Energy Co, a unit of tech conglomerate Panasonic Holdings Corp and a major Tesla Inc supplier, said it had selected Kansas as the site for a new battery plant with investment of up to $4 billion.Earlier this year, Honda laid out a target to roll out 30 EV models globally and produce about 2 million EVs a year by 2030.