Honda is considering sourcing hybrid vehicle batteries from Toyota’s North Carolina plant as U.S. tariffs on Chinese and South Korean imports increase costs, according to a report by Japanese business portal Nikkei.
Toyota has invested $14 billion in the North Carolina facility, which is set to begin production in April. The plant will initially operate four production lines for hybrid vehicle batteries, with plans to expand to eight additional lines for battery electric and plug-in hybrid vehicles.
Honda is expected to use Toyota’s batteries for its CR-V hybrid SUV, with the possibility of integrating them into other models.
The move comes as Honda seeks to localize production amid potential tariff hikes on Japanese automotive imports. The company estimates that 25% reciprocal tariffs on goods from Mexico and Canada could cost it $4.7 billion annually.
Hybrid vehicles remain a strong segment in the U.S. market, with Honda selling over 300,000 hybrids in 2023, accounting for 22% of its total U.S. sales.
