Demand cooling impacts supply chain LG New Energy sells battery factory to Honda (HMC.US) for US$2.9 billion

The Zhitong Finance App learned that as the impact of the cooling demand for electric vehicles in the US continues to affect the industry supply chain, LG New Energy will sell facilities and other assets at its joint venture battery plant in Ohio to Honda Motor (HMC.US) for about 4.2 trillion won (2.9 billion US dollars).

Seoul-based LG New Energy said in regulatory documents submitted on Wednesday that the acquirer of this deal is Honda's US subsidiary, and the settlement is expected to be officially completed by the end of February next year. LG Energy said the move was aimed at improving operational efficiency.

Currently, the transformation process of electric vehicles outside of China has been hampered, and the development prospects of Korean battery manufacturers have deteriorated. Previously, Ford Motor Company (F.US) had reduced its electric vehicle business plan, not only terminated the 9.6 trillion won battery cooperation agreement with LG New Energy, but also terminated the joint venture project with SK Innovation in the US.

Back in 2022, Honda and LG New Energy announced an investment plan totaling 4.4 billion US dollars to build an electric vehicle battery factory in Ohio. Mass production was originally scheduled to begin at the end of 2025.

According to another report, the US immigration department previously carried out an unprecedented surprise inspection of the joint venture between LG New Energy and South Korea's Hyundai Motor Company in Georgia, and detained more than 300 Korean employees on the spot.

Faced with successive setbacks, LG New Energy is speeding up its energy storage business layout, while two new production lines in Arizona and Michigan are also under construction to hedge against the impact of the decline in business.