South Korea’s LG Energy Solution said on Wednesday it will sell a factory building and related assets in the U.S. state of Ohio to Honda Development and Manufacturing of America, as the partners seek to improve operational efficiency at their battery joint venture.
The planned transaction, valued at $2.86 billion, excludes land and equipment and is intended to enhance the efficiency of the joint venture’s operations, LG Energy Solution said in a regulatory filing. The South Korean battery maker added that it does not plan to dissolve the joint venture or reduce its stake.
Honda Motor and LG Energy Solution announced in 2022 that Ohio would host their planned $4.4 billion joint-venture battery plant. A person familiar with the matter said the asset sale is aimed at enabling smoother factory operations, with battery production expected to begin next year.
“Honda’s acquisition of the building assets has enabled Honda to commit to batteries over the long term, allowing us to flexibly respond to batteries, not only for electric vehicles, but also hybrid vehicles,” a Honda spokesperson told Reuters.
The decision follows a series of setbacks for South Korean battery makers linked to slower-than-expected growth in the electric vehicle market. Last week, LG Energy Solution said Ford Motor had terminated an EV battery supply agreement valued at about 9.6 trillion won ($7 billion). Ford said it would take a $19.5 billion writedown and cancel several electric vehicle models, citing weaker demand and policy shifts under the Trump administration.
Elsewhere in the sector, battery maker SK On ended its joint venture with Ford in the United States this month. Other South Korean companies have also begun repurposing battery production lines to supply energy storage systems for uses such as data centres, reflecting a broader adjustment to changing market conditions.
