LG Energy Solution unit sells Ohio plant building to Honda for $2.86 billion

South Korea’s LG Energy Solution said in a regulatory filing on December 24 that a unit will sell the plant building and building related facilities of the L H Battery Company joint venture in Ohio to Honda Development and Manufacturing of America for $2.86 billion. The transaction covers the physical plant structure and associated building assets, while the land and production equipment are explicitly excluded. The figure has been reported equivalently at about 4.2 trillion won or roughly $2.9 billion, and may be adjusted after due diligence and exchange rate movements.

LG Energy Solution presented the sale as a measure to improve joint venture operational efficiency and to reduce capital burdens tied to construction costs, which have been a major component of total project investment. The original project was announced in 2022 with an estimated size of roughly $4.4 billion. Under the new arrangement the joint venture will remain intact, LG Energy Solution will maintain its equity stake, and production is expected to continue with the company arranging to lease the building from Honda so operations can proceed into 2026 when the plant is scheduled to begin output.

Economically the transaction represents an asset light maneuver intended to free cash tied up in fixed assets and to lower near term capital expenditure requirements. Selling a completed or near completed structure while retaining control of production through leaseback is a way to convert sunk construction spending into liquidity that can be redeployed, potentially toward additional production lines or energy storage projects. LG Energy Solution is expanding other U.S. footprint investments, building lines in Arizona and Michigan and growing its energy storage business even as it trims the capital intensity of this Ohio project.

The timing and nature of the deal reflect wider pressures across the electric vehicle supply chain. Automakers and suppliers have been reassessing near term EV investment plans amid softer global demand and a relative winding down of certain U.S. consumer EV subsidies, factors that have reduced visibility on vehicle uptake and return on incremental battery capacity. Industry commentators have pointed to similar strategic retrenchments elsewhere, including scaled back investment plans by other major automakers.

Operationally the company faces additional near term disruptions in the U.S. Reports of recent immigration enforcement activity at a separate LG joint venture in Georgia, where over 300 South Korean workers were detained, have added to uncertainty around labor and project timelines for LG affiliates in the country.

For Honda, buying the building gives the automaker control of a major fixed asset and creates a new revenue stream through lease arrangements with the joint venture. For investors and policy makers, the transaction is a signal that capital structures in the EV supply chain are shifting, with more emphasis on flexibility and risk sharing between automakers and battery suppliers as the sector navigates slower demand and changing subsidy regimes.