Orienting its business toward electric vehicles, Honda is planning a $4.4 billion total investment in electric vehicle and battery production, with a retooling of existing production capacity in three plants, the automaker said Tuesday.
In what’s being called a “once-in-a-hundred-years-change,” Honda plans more than 2,500 projected new Ohio jobs, in both a new battery production site about 50 minutes southeast of Dayton and re-tooled auto assembly and engine plants.
The plans include investing $700 million to re-tool existing auto and powertrain plants for production of electric vehicles, which will result in 300 new jobs.
Additional to that, $3.5 billion will be invested with LG Energy Solutions to build a joint venture facility to make the battery modules to power those new electric vehicles — creating an expected 2,200 jobs.
“Our operations here will play a key role as a new EV hub,” Bob Nelson, executive vice president of American Honda Motor Co. Inc., said Tuesday at the Ohio Statehouse.
“Truly, today is a great day for Ohio,” Gov. Mike DeWine said.
The battery plant will be in Fayette County, about an hour southeast of Dayton. The facility will produce pouch-type batteries to supply Honda plants for production of electric vehicles, also called “EVs”.
Honda and LG plan to begin construction in Fayette County in early 2023, completing the new production facility by the end of 2024, Honda said. The site will be near Interstate 71 and U.S. 35, but an exact location has not been announced.
Mass production of battery modules using pouch-type, Li-ion cells is expected by the end of 2025, with an annual production capacity of some 40GWh (gigawatt hours).
The plans will also retool Honda’s Marysville and East Liberty auto assembly plants and its Anna engine production plant. Honda said it expects more than 300 new jobs in those plants.
“This is a very challenging time for our entire industry, but also a very exciting time as Honda invests in full electric vehicle production in the Buckeye State,” Nelson said. “Honda has built hybrid-electric vehicles in Ohio for a number of years, and the experience and expertise of our associates in manufacturing, product development, and purchasing will serve as an important foundation as we transition to the electrified future.”
In a briefing before Tuesday’s formal announcement at the Statehouse, Nelson said production of internal combustion engine automobiles will continue for “quite some time.” The automaker has pledged to achieve “carbon neutrality” by 2050.
He declined to estimate how the eventual cessation of gas vehicle production would affect Honda’s employment in Ohio long-term.
“As things evolve and as we move forward, we will consider that in the future, but our announcement stands based on exactly that,” Nelson said, referring to the 2,500 total projected jobs between the battery plant and the changes planned for the three existing plants.
Asked about possible government incentives for the projects, Nelson said in Monday’s briefing: “I can only say this is part of our long-term strategy and we are in discussions with the state.”
The EV announcement came 45 years to the day after Honda announced its Ohio first production facility, a motorcycle plant — October 11, 1977.
Honda produced and sold a record of more than 100,000 electrified vehicles in the U.S. last year, including the Accord Hybrid, CR-V Hybrid and Insight hybrid sedan.
“It’s another win for America and another win for Ohio, with Honda and LG committing more than $5 billion toward electric vehicle battery manufacturing and factory retooling across the state,” President Biden said in a statement.
“America is leading the world again, rebuilding our supply chains, infrastructure, and manufacturing here at home,” the president added.
Honda has a deep footprint in Ohio, employing nearly 15,000 workers in five Ohio plants. The company has about 8,000 workers from the Miami Valley who work at its Anna engine plant and Troy distribution sites and about 1,400 workers from Clark and Champaign counties work for the automaker.
Honda purchased about $7 billion from Ohio suppliers last year, Nelson said.
Jeff Hoagland, chief executive and president of the Dayton Development Coalition, said Honda’s intentions position “the Dayton region for a leading role in the transformation of the automotive industry.”
“Honda’s rededication to Ohio reflects a shared history of over four decades and the deep network of suppliers and regional workers supporting their operations,” Hoagland said. “We’re honored Honda chose Ohio to power their future.”
“What makes me proudest is that this year, we finally buried the term ‘rust belt,’” U.S. Sen. Sherrod Brown said at the statehouse gathering Tuesday, citing recent statewide economic wins, including Intel’s plans to build two semiconductor production sites near Columbus.
Secretary of Energy Jennifer Granholm, also at the statehouse, congratulated Ohio leaders and said Honda’s plans can be seen as part of a global push toward clean energy. “We can compete and we can win.”
“Ohio’s automobile manufacturing legacy begins another amazing chapter today,” Ryan Augsburger, president of the Ohio Manufacturing Association, said in a statement. “The Buckeye state is already a leader in North America’s quickly evolving EV market. This latest development will ensure Honda has dependable access to Ohio-manufactured batteries — and Ohioans can look forward to more well-paying career opportunities in the near future as Honda continues to invest in our state.”
LG Energy Solutions is the largest electric vehicle battery maker in the world.