Honda's $2.86 Billion Move to Secure Ohio Battery Production Assets

Honda Motor Co., Ltd. [HMC] is moving forward with purchasing facility assets in Ohio from South Korea-based LG Energy Solution in a transaction valued at approximately $2.86 billion. The deal, which does not include land or production equipment, aims to strengthen operations within their joint battery manufacturing partnership, according to regulatory documents filed. The transaction price remains subject to refinement pending final due diligence procedures and currency fluctuation adjustments, with expected closure around February 28.

Back in 2022, Honda and LGES jointly identified Ohio as the location for their planned $4.4 billion battery production facility. Through acquiring these building assets, Honda is positioning itself for long-term battery manufacturing capabilities while maintaining flexibility to supply power solutions for both electric vehicles and hybrid models across North America, as reported by Reuters.

Strategic Structure and Operational Timeline

The deal will be arranged through a sale-leaseback model—Honda’s American operations arm will purchase the property while simultaneously leasing it back to the joint venture entity. This arrangement provides Honda with ownership benefits while keeping the facility operational under the partnership framework.

Production is scheduled to commence at scale during the coming year, with the plant supplying batteries for Honda’s core lineup as well as its Acura premium division. The investment underscores Honda’s commitment to battery supply chain security amid the automotive industry’s accelerating electrification transition.

Market Context and Competitive Dynamics

The transaction emerges following LGES’ recent disclosure that Ford terminated an electric vehicle battery supply contract previously valued at approximately 9.6 trillion won. This development highlights the evolving landscape of battery supply partnerships and the strategic importance of securing long-term production capacity within North America—a key market for automotive manufacturers transitioning toward electrified powertrains.

For Honda, securing these battery production assets represents a critical step in controlling supply chain dependencies while supporting its broader electrification roadmap for both mainstream and premium vehicle segments.