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

As the impact of cooling demand for electric vehicles in the United States continues to ripple through the industry supply chain, LG Energy Solution will sell its facilities and other assets at a joint venture battery plant in Ohio to Honda Motor Co., Ltd. Sponsored ADR (HMC.US) for about 4.2 trillion Korean won (29 billion US dollars). LG Energy Solution, based in Seoul, stated in regulatory filings submitted on Wednesday that the acquirer of this transaction is a U.S. subsidiary of Honda, and the deal is expected to be formally completed by the end of February next year. LG Energy Solution said that this move is aimed at improving operational efficiency. Currently, the transition of electric vehicles outside of China is facing obstacles, and the prospects of Korean battery manufacturers are deteriorating. Earlier, Ford Motor Company (F.US) downscaled its electric vehicle business plans, not only terminating a battery cooperation agreement worth 9.6 trillion Korean won with LG Energy Solution, but also ending a joint venture project with South Korea's SK Innovation in the United States. Looking back to 2022, Honda and LG Energy Solution had announced a total investment plan of 4.4 billion US dollars to build an electric vehicle battery factory in Ohio, originally scheduled to start production at the end of 2025. According to reports, the U.S. immigration department previously conducted an unprecedented surprise inspection of LG Energy Solution and Hyundai Motor's joint venture in Georgia, detaining over 300 South Korean employees on the spot. Facing a series of setbacks, LG Energy Solution is accelerating the deployment of its energy storage business. At the same time, its two new production lines in Arizona and Michigan are under construction to offset the impact of the business downturn.