The latest such facility to be established in a Republican-run state is the $4.4 billion electric vehicle (EV) plant that Honda and battery manufacturer LG revealed plans for on Monday. It is expected to be situated in the Republican-run state of Ohio.
In an effort to ensure that their EVs qualify for tax credits with the new restrictions in the Inflation Reduction Act that requires the EVs to be assembled in the U.S., Honda is joining rivals like Hyundai and Ford who are building new EV and battery facilities primarily in Republican-run states and congressional districts. Although the firms kept the site a secret, sources with knowledge of the situation told The Wall Street Journal that the Honda-LG facility was slated for Ohio, where Honda already has a sizable presence with an auto facility in Marysville.
According to Ballotpedia, the plant will be situated in Ohio’s 15th Congressional District, that has been firmly Republican for over 30 years with the exception of one-term Dem. Rep. Mary Jo Kilroy from 2009 to 2011. According to CNBC, other businesses entering the EV field have been locating their plants close to existing manufacturing in Ohio, where Republicans hold the governor’s office and both chambers of the state legislature.
The plant will be comparable to those being constructed by rivals, such as a $5.5 billion Hyundai plant in Georgia and a $5.8 billion Ford plant in Kentucky, all of which are aiming to begin production in 2025. According to Honda’s news statement, the plant under the joint partnership will only make batteries for Honda. Production is expected to start in the early months of 2023, and the full production of the “advanced lithium-ion battery cells” is anticipated to start by the end of 2025.
According to the WSJ, Honda promised to spend around $36 billion by 2030 developing 30 different electric car models in collaboration with General Motors and Sony. According to S&P Global Commodity Insights, joint ventures between vehicle manufacturers or between auto manufacturers and battery manufacturers are one approach to reduce expenses in the face of growing material costs.
Since announcing ambitions to convert its entire fleet to EVs by 2040, the plant is Honda’s first important move in building its own supply chain for batteries and EV components, according to the WSJ. Even as other international automakers have started to enter the expanding industry, Honda has yet to release an EV for the mainstream market.
According to the WSJ, which used the International Energy Agency’s estimations for the average battery capacity of an EV, the plant’s anticipated yearly production of 40 gigawatt hours of batteries would be sufficient to power more than 700,000 vehicles.