In late December 2025, Honda plans to Buy Out LG Energy’s Ohio EV Battery Plant, marking a significant move in the U.S. electric vehicle (EV) sector. Honda Motor Co. has agreed to acquire the plant’s buildings and related facilities from LG Energy Solution (LGES) for approximately $2.9 billion (4.2 trillion won). The transaction excludes the land and equipment and is structured under a “sale and leaseback” model, ensuring operational continuity for the joint venture.
Honda Motor Co. will buy out LG Energy Solution Ltd’s facilities and other assets from their joint battery plant in Ohio for about 4.2 trillion won ($2.9 billion) as America’s pullback in electric vehicles continues to ripple across the industry’s supply chain.
Deal Structure and Timeline
Honda’s U.S. unit will purchase the physical plant assets while the joint venture, L-H Battery Company, will lease back the facility and continue production as planned. LGES confirmed that its equity stake in the venture remains unchanged, and the joint venture will not be dissolved. The transaction is expected to close by February 28, 2025, enabling a smooth transition without disrupting production schedules.
Strategic Rationale Behind the Move
The decision comes amid a cooling of EV demand in North America. Automakers are reassessing growth assumptions due to slower-than-expected EV adoption and potential adjustments in U.S. government incentives. For LGES, selling the Ohio plant assets helps reduce capital burdens, improve operational efficiency, and secure funds for ongoing projects. Meanwhile, Honda views this acquisition as a long-term commitment to battery production while maintaining flexibility to manufacture batteries for both electric and hybrid vehicles.
Plant History and Production Plans
The Ohio facility was initially announced in 2022 as part of a $4.4 billion joint venture between Honda and LGES. Mass production of battery cells is targeted for 2026, aiming to supply North American Honda and Acura EV models. Once fully operational, the plant is designed to produce up to 40GWh of battery cells annually.
Broader Industry Context
The move reflects a wider trend of cooling EV investments outside China. South Korean battery makers, including LGES, are recalibrating strategies as uncertainty grows. Ford recently scaled back EV plans, scrapping a 9.6 trillion won battery deal with LG and ending a U.S. joint venture with SK Innovation. LGES is also facing operational challenges, such as a recent U.S. immigration raid on its Georgia facility with Hyundai, which temporarily disrupted staffing. However, the company continues to expand its operations in Arizona, Michigan, and the energy storage sectors.
By acquiring full control, Honda to Buy Out LG Energy’s Ohio EV Battery Plant ensures it remains a key player in the North American EV supply chain while navigating a shifting market landscape. This strategic step underscores Honda’s dedication to long-term battery production and flexibility across EV and hybrid technologies.
The transaction exemplifies how automakers and battery manufacturers are adapting to slower EV adoption while positioning for future growth. Ultimately, Honda to Buy Out LG Energy’s Ohio EV Battery Plant represents both a financial recalibration for LGES and a strategic commitment for Honda.
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