Released September 01, 2022 | SUGAR LAND
en
Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Korea-based LG Energy Solution (LGES) and Japan's Honda Motor Company (NYSE:HMC) (Tokyo) said they were setting up a joint venture to spearhead production of lithium-ion battery cells in the United States, a move that could eat into China's market share.
LGES and Honda said they would invest $4.4 billion to set up a new plant in an as-yet-determined location in the United States. Construction through the joint venture, controlled by LGES, is slated for 2023 for a 40 gigawatt-hour (GWh) facility that could be producing lithium-ion battery cells two years after the first shovel hits the ground.
Toshihiro Mibe, the president and chief executive officer at Honda Motor, said the joint venture is in line with his company's commitment to local procurement of batteries for electric vehicles (EVs).
"This initiative in the U.S. with LGES, the leading global battery manufacturer, will be part of such a Honda approach," he said in a statement.
The shift toward more renewable forms of energy, the so-called energy transition, means that dependencies are moving away from fossil fuel producers and toward those rich in the minerals and metals that will form the backbone of the energy mix of the future.
Tesla Incorporated (NASDAQ:TSLA) (Austin, Texas) is arguably the largest lithium-ion battery manufacturer in the United States, but proprietary issues keep those batteries out of vehicles from other auto manufacturers. One must look to the Asian market, and largely China, to find the major centers of EV technology, leaving the North American car market in a vulnerable state of dependency.
The situation is similar for uranium, in which a pound has more or less the same energy potential as 20,000 pounds of coal. By the start of the 21st century, there were only three uranium mines working in the United States, leaving the country heavily dependent on the likes of Kazakhstan, a former Soviet republic.
But shifting the actual manufacturing of batteries to the market where the vehicles are built could go a long way to reduce some of those dependencies.
Analysis from consultancy Rystad Energy (Oslo, Norway) notes the agreement between LGES and Honda is "a move that would reduce dependency on China for fuel cells."
The LGES-Honda joint venture is not a novel development, however. Rystad points out a similar deal between Panasonic Holdings Corporation (Osaka, Japan) and Tesla for what would be their second battery plant in the United States, catering exclusively to Elon Musk's vehicle company.
Not to be outdone, Toyota Motor Corporation (NYSE:TM) (Toyota, Aichi, Japan) said it plans to invest $2.5 billion at a facility in North Carolina that will build batteries for both hybrid and full-battery vehicles.
A lot of the shift to produce lithium-ion batteries here at home comes from incentives outlined in the Inflation Reduction Act, a measure that covers everything from energy to healthcare costs.
That measure outlines some protectionism in the U.S. economy by placing restrictions on where companies get their raw materials and other goods. The aim is to create a domestic value chain for the energy transition by working with countries that have a free-trade agreement with the United States, such as Korea.
"A large influx of investments is now coming in following the passing of the Inflation Reduction Act, which has placed strict restrictions on sourcing of raw materials and batteries from Free-Trade Agreement countries and create a domestic supply chain across all verticals," the analysis from Rystad reads. "In particular, non-Chinese cell manufacturers have already announced massive investments in the country and are preparing themselves for the revamped tax incentives."
Some U.S. states such as California are moving quickly away from the internal combustion engine. Right now, the United States is lagging behind peer economies in terms of alternative vehicles, but developments like these give a nation that is now a leading crude oil exporter room to maneuver in the race that is the global energy transition.
Industrial Info's Global Market Intelligence (GMI) project data show that, in terms of spending on lithium-ion battery projects, the United States may already be leading the way. Industrial Info's GMI Industrial Manufacturing Project Database includes 290 projects totaling $140 billion worldwide for lithium-ion battery manufacturing. Subscribers can click here for a list of detailed project reports. This sector is exploding.
Click on the image at right for a chart showing the top 10 countries for lithium-ion battery project activity.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).
LGES and Honda said they would invest $4.4 billion to set up a new plant in an as-yet-determined location in the United States. Construction through the joint venture, controlled by LGES, is slated for 2023 for a 40 gigawatt-hour (GWh) facility that could be producing lithium-ion battery cells two years after the first shovel hits the ground.
Toshihiro Mibe, the president and chief executive officer at Honda Motor, said the joint venture is in line with his company's commitment to local procurement of batteries for electric vehicles (EVs).
"This initiative in the U.S. with LGES, the leading global battery manufacturer, will be part of such a Honda approach," he said in a statement.
The shift toward more renewable forms of energy, the so-called energy transition, means that dependencies are moving away from fossil fuel producers and toward those rich in the minerals and metals that will form the backbone of the energy mix of the future.
Tesla Incorporated (NASDAQ:TSLA) (Austin, Texas) is arguably the largest lithium-ion battery manufacturer in the United States, but proprietary issues keep those batteries out of vehicles from other auto manufacturers. One must look to the Asian market, and largely China, to find the major centers of EV technology, leaving the North American car market in a vulnerable state of dependency.
The situation is similar for uranium, in which a pound has more or less the same energy potential as 20,000 pounds of coal. By the start of the 21st century, there were only three uranium mines working in the United States, leaving the country heavily dependent on the likes of Kazakhstan, a former Soviet republic.
But shifting the actual manufacturing of batteries to the market where the vehicles are built could go a long way to reduce some of those dependencies.
Analysis from consultancy Rystad Energy (Oslo, Norway) notes the agreement between LGES and Honda is "a move that would reduce dependency on China for fuel cells."
The LGES-Honda joint venture is not a novel development, however. Rystad points out a similar deal between Panasonic Holdings Corporation (Osaka, Japan) and Tesla for what would be their second battery plant in the United States, catering exclusively to Elon Musk's vehicle company.
Not to be outdone, Toyota Motor Corporation (NYSE:TM) (Toyota, Aichi, Japan) said it plans to invest $2.5 billion at a facility in North Carolina that will build batteries for both hybrid and full-battery vehicles.
A lot of the shift to produce lithium-ion batteries here at home comes from incentives outlined in the Inflation Reduction Act, a measure that covers everything from energy to healthcare costs.
That measure outlines some protectionism in the U.S. economy by placing restrictions on where companies get their raw materials and other goods. The aim is to create a domestic value chain for the energy transition by working with countries that have a free-trade agreement with the United States, such as Korea.
"A large influx of investments is now coming in following the passing of the Inflation Reduction Act, which has placed strict restrictions on sourcing of raw materials and batteries from Free-Trade Agreement countries and create a domestic supply chain across all verticals," the analysis from Rystad reads. "In particular, non-Chinese cell manufacturers have already announced massive investments in the country and are preparing themselves for the revamped tax incentives."
Some U.S. states such as California are moving quickly away from the internal combustion engine. Right now, the United States is lagging behind peer economies in terms of alternative vehicles, but developments like these give a nation that is now a leading crude oil exporter room to maneuver in the race that is the global energy transition.
Industrial Info's Global Market Intelligence (GMI) project data show that, in terms of spending on lithium-ion battery projects, the United States may already be leading the way. Industrial Info's GMI Industrial Manufacturing Project Database includes 290 projects totaling $140 billion worldwide for lithium-ion battery manufacturing. Subscribers can click here for a list of detailed project reports. This sector is exploding.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).
