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Honda to set up China venture to procure EV batteries

Image credit: Hadi Yazdi Aznaveh

Honda To Set Up China Venture To Procure EV Batteries

Honda Motor Co said on its Chinese unit will establish a joint venture with Dongfeng Motor Group and Guangzhou Automobile Group Co at the end of the month to procure batteries for fully electric vehicles.

(REUTERS): The automaker’s Chinese division has also agreed to strengthen its existing partnership with CATL, the world’s largest battery maker, to ensure a stable supply of batteries, it said in a statement. At present, Honda’s joint ventures to manufacture and sell four-wheel vehicles in China, Dongfeng Honda and Guangqi Honda, receive their batteries separately from CATL.

The latest change, however, will allow battery procurement to be centralised through the soon-to-be-launched joint venture to increase efficiency. Honda will invest 50 percent into the joint venture while Dongfeng and Guangzhou will each invest 25 percent into it.

Honda Motor Co has formed a partnership with trading company Hanwa Co to secure stable supply of metals used in batteries for electrified vehicles, the Japanese automaker revealed. It will be able to obtain essential metals such as nickel, cobalt and lithium through the partnership in the medium to long term, it said in a statement.

Procurement of those elements will be among many challenges for automakers worldwide as stricter environmental regulations accelerate production and sales of cleaner, electrified cars. Honda said it had picked Hanwa for its strength in resource procurement. This year Honda laid out a target to roll out 30 electrified vehicle (EV) models globally and produce more than 2 million EVs a year by 2030. It aims at selling only fully electric vehicles and fuel cell electric vehicles by 2040.


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