Honda Motor has reached an agreement to purchase battery manufacturing assets from LG Energy Solution in Ohio for $2.9 billion, marking a major step in the Japanese automaker’s effort to lock down critical electric vehicle supply chains in the United States.
The transaction involves facilities that were initially developed as part of a joint venture between Honda and LG Energy Solution. Once completed, Honda will assume full ownership and operational control of the Ohio battery assets, which are expected to play a central role in the company’s North American EV rollout.
The deal underscores the growing urgency among global automakers to secure localized battery production as electric vehicle demand accelerates and geopolitical pressures reshape industrial strategy.
Honda Is Taking Full Control
Honda’s move reflects mounting pressure on automakers to reduce dependence on overseas battery supply, particularly from Asia. By consolidating ownership of the Ohio facilities, Honda gains greater flexibility over production schedules, technology integration, and cost management.
Battery manufacturing is one of the most capital-intensive and strategically sensitive parts of the EV value chain. Controlling the assets allows Honda to better align battery output with its vehicle production plans while responding more quickly to shifts in demand and regulation.
The acquisition also positions Honda to maximize benefits from U.S. industrial policy. Domestic battery production qualifies for incentives tied to clean energy and manufacturing initiatives, which aim to strengthen local supply chains and reduce exposure to global disruptions.
As previously covered, automakers have increasingly favored outright ownership over joint ventures to protect intellectual property and streamline decision-making as competition in EVs intensifies.
Implications for the EV Market
The $2.9 billion deal highlights how aggressively traditional automakers are investing to catch up with EV leaders. Securing battery assets reduces long-term operational risk but raises near-term capital commitments at a time when margins across the auto industry remain under pressure.
For investors, the transaction signals Honda’s commitment to scaling EV production in the U.S., even as pricing competition intensifies and demand growth shows signs of unevenness across regions. The move may weigh on free cash flow in the short term, but it strengthens Honda’s strategic position as battery availability becomes a key differentiator.
The deal also reflects a broader shift in the global auto sector toward vertical integration, with companies seeking tighter control over critical technologies amid trade tensions, tariffs, and regulatory scrutiny.
If approved by regulators, the transaction is expected to close in 2026, aligning with Honda’s timeline for expanding its U.S. electric vehicle lineup and increasing localized manufacturing capacity.
