LG Energy Solution created a joint venture with Stellantis to construct a large-scale battery plant in Ontario, Canada — the country’s largest automotive cluster. The companies said they expect the plant will spur a “strong battery supply chain in the region.”
Now, Honda is following a similar script in Ohio. In addition to the joint venture with LG Energy Solution, the automaker announced it will invest $700 million to retool three Ohio plants.
“These Honda facilities, along with the new EV battery plant, will serve as a new EV hub in Ohio,” the company said. “Honda’s EV hub will leverage the company’s longstanding production, product development and purchasing operations located in Central Ohio.”
The actions come as the automaker aims to begin EV production and sales in North America by 2026, and make battery-electric and fuel cell EVs represent 100% of its vehicle sales in North America by 2040. EV batteries manufactured at the joint venture plant will be combined with battery cases produced at Honda’s Anna Engine Plant and installed in EVs built at two other Ohio plants, after they are revamped for EV production.
Ford has begun construction on an EV “mega campus,” bringing suppliers, a battery plant and assembly line to one location to exert greater control over its supply chain. General Motors has taken a similar approach, with two of its joint venture battery plants located in Ohio and Michigan near neighboring facilities. Automakers’ U.S. investments come on the heels of federal incentives encouraging domestic production of electric vehicles.
Classroom discussion questions:
- What are clusters and hubs and why are they important? Provide examples from other industries.
- What drives the battery production?