LG Energy Solution said Wednesday it will sell the building of its Ohio electric vehicle battery joint venture plant to its partner Honda for 4.2 trillion won ($2.9 billion), seeking to reduce capital burdens amid a global slowdown in EV demand.
According to LG Energy Solution’s regulatory filings, the battery maker will dispose of the building and all building-related facilities of the joint venture L-H Battery Company — excluding the land and equipment — to Honda’s US unit. The final selling price may vary after due diligence and exchange-rate adjustments, with the transaction scheduled to be completed Feb. 28.
The joint venture will continue to use the facility under a lease agreement, with no changes to production or operational plans. As planned, LG Energy Solution and Honda will start battery production next year for Honda’s North American EV lineups, with the possibility of expanding production to energy storage system applications.
By leasing the building, LG Energy Solution expects to ease financial pressure by cutting construction costs, which typically account for the largest share of total investment. The company noted that the move is part of its strategy to boost liquidity tied up in fixed assets as it navigates growing uncertainty primarily driven by a global EV downturn and the ending of US consumer EV subsidies.
An LG Energy Solution official stated, “The joint venture with Honda remains a key strategic base in North America,” adding that the two companies would continue to respond flexibly to market conditions while building the foundation for mid- to long-term growth.
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