LG Energy Solution to Sell $2.86 Billion US Factory Assets to Honda

• The $2.86 billion asset sale is part of a $4.4 billion joint venture announced in 2022, with Honda committing to long-term battery production for both electric and hybrid vehicles
• Ford announced a non-cash charge related to unwinding EV battery capacity agreements with LGES and scrapping several electric vehicle models amid weakening EV demand
• South Korean battery makers are pivoting to alternative markets, with SK On canceling a battery deal with Ford and repurposing production lines for energy storage systems for data centers

LG Energy Solution (LGES) announced a $2.86 billion deal to sell factory building and assets in Ohio to Honda Development and Manufacturing of America, excluding land and equipment. The transaction aims to "improve joint venture operational efficiency" as part of their $4.4 billion battery plant partnership announced in 2022.

The South Korean battery maker clarified it will maintain its stake in the joint venture, with production expected to begin next year. The sale enables more flexible operations for the factory, which will produce batteries for both electric and hybrid vehicles. A Honda spokesperson confirmed the acquisition demonstrates their long-term commitment to battery technology across multiple vehicle types.

This move comes one week after LGES canceled plans to build electric vehicle battery cells with Ford Motor worth approximately 9.6 trillion won ($7.3 billion). Ford subsequently announced a $1.9 billion non-cash charge and plans to scrap several EV models, reflecting the auto industry's broader retreat from battery-powered vehicles amid Trump administration policies and weakening EV demand.

The deal highlights shifting dynamics in the EV battery sector, where manufacturers are adapting to changing market conditions. While some partnerships are being restructured or canceled, others like SK On have repurposed U.S. production lines to manufacture batteries for energy storage systems serving data centers and other facilities.

The transaction underscores LGES's strategic repositioning in the U.S. market, optimizing existing partnerships while responding to evolving demand patterns in the automotive battery sector. The company maintains its commitment to the Ohio facility while improving operational flexibility through this asset restructuring.