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LG Energy Solution. (Photo: Yonhap News) |
[Alpha Biz= Paul Lee] LG Energy Solution said it will sell its U.S. battery plant, jointly established with Japan’s Honda Motor, to Honda’s U.S. subsidiary as part of efforts to strengthen financial flexibility amid a slowdown in electric vehicle demand.
The company said in a regulatory filing on the 24th that L-H Battery Company, the joint venture between LG Energy Solution and Honda, will sell all buildings and related facilities at its Ohio plant to Honda’s U.S. development and manufacturing unit. The transaction is valued at 4.2212 trillion won (approximately $3.1 billion) based on asset values as of the end of last month, with proceeds expected to be received in the first half of next year. The final sale price may change depending on due diligence results and exchange rates.
The deal will be structured as a sale-and-leaseback, under which the plant will continue operating without disruption. LG Energy Solution said production and mass manufacturing schedules will remain unaffected, as the company will continue using the same facilities. Batteries produced at the plant will be supplied to Honda and its premium brand Acura for vehicles sold in the North American market starting next year.
LG Energy Solution said the sale will help secure liquidity and improve its ability to respond to market volatility. Sale-and-leaseback transactions are commonly used to unlock cash tied up in fixed assets.
The move comes as a prolonged slowdown in global EV demand — often referred to as an “EV chasm” — weighs on the battery industry. Demand in the North American EV market has weakened further amid the rollback of U.S. electric vehicle subsidies. LG Energy Solution recently also announced the cancellation of a 9.6 trillion won battery supply contract with Ford Motor.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
