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SEOUL, Jan. 17 (UPI) -- South Korean battery maker LG Energy Solution has entered into a partnership with Japanese carmaker Honda Motor to build a new battery factory in the United States. The lithium-ion battery plant by the new joint venture, tentatively named L-H Battery Co., will be located near Jeffersonville, Ohio, the companies announced Friday.
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The construction is slated to begin this year with the aim of finishing by the end of 2024 so that the production of lithium-ion battery cells could be realized in 2025, LG Energy Solution said.
The new factory will have a production capacity of around 40GWh annually with all the battery output dedicated for use in Honda's electric vehicles in North America, LG Energy said.
Honda has an automotive factory in Ohio but no electric vehicle plant.
The two companies have committed to investing a total of $3.5 billion on the building of the facility, a project that could help create more than 2,000 jobs. Their overall investment is expected to reach $4.4 billion.
"LG Energy Solution has all the right assets to make this joint venture a success, including the financial stability, quality, competitiveness and production capacity with global operational expertise," L-H Battery CEO Robert H. Lee said in a statement.
"With two companies' expertise combined, we will provide top-quality batteries to ensure the successful launch of Honda EVs in North America and grow with the community here in Ohio by creating high-value jobs," he said.
Experts say the joint venture was likely spurred by the Inflation Reduction Act, signed by U.S. President Joe Biden in August.
Under its guidelines, electric cars must be assembled in North America to qualify for tax credits, a move that has prompted various automakers and battery manufacturers to bring new investments to the United States.
"More and more EV-related companies from Korea and Japan will begin setting up factories in the United States due to the IRA rules," Daelim University automotive Professor Kim Pil-soo told UPI News Korea.
In December, the U.S. Energy Department announced it closed a $2.5 billion loan for a partnership between General Motors and LG Energy Solutions to build three electric vehicle battery plants -- in Michigan, Ohio and Tennessee.
