Ohio will consider a $71.3 million tax break for Honda’s planned $4.4 billion expansion to make electric vehicles (EVs) and the batteries that power them.
To back Honda’s creation of a new joint-venture EV battery plant less than 50 minutes away from Dayton, the Ohio Tax Credit Authority will consider a 1.871%, 30-year Job Creation Tax Credit at an upcoming meeting, the Ohio Department of Development said Thursday.
The EV battery plant, to be built with LG Energy Solution, will employ an expected 2,200 workers, Honda and the state have said. Existing plants in Marysville, East Liberty and Anna are to be retooled for EV production at those sites, creating an additional 300 new jobs.
“The project qualifies as a mega project and is therefore eligible for an expanded JCTC with an estimated value of $71.3 million,” the department said in an emailed statement. “The JCTC is performance-based, and the company must fulfill its job creation and payroll commitments to receive the credit.”
Honda will also be expected to submit annual reports to the state to verify progress on these metrics, the state said.
Gov. Mike DeWine’s administration will also work with the General Assembly to invest an additional $85 million in local water and transportation infrastructure upgrades to support the expansion.
For every $1 the state invests in direct cash incentives, Honda invests at least $50, a 50:1 return, according to the department.
“JobsOhio plans to provide grant assistance for the Honda projects, which will be made public after it is executed,” a JobsOhio spokesman said. “It is important to keep existing companies like Honda growing in Ohio, which will come with the retooling.”
Honda’s 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.
“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.
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.
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.
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