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LG Energy Solution and Honda announce U.S. EV battery plant, incentives take focus

Wind turbines at Honda Transmission Mfg. of America

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Korea’s LG Energy Solution and Japan’s Honda Motor Co. have announced they will build a lithium-ion battery manufacturing plant in the United States. The collaboration between LG Energy Solution and Honda brings yet another large-scale EV battery manufacturing project to the United States, following CATL and Panasonic, as President Biden’s Inflation Act will now focus on domestically-produced electric vehicles and components.

LG Energy Solution and Honda’s joint venture will see a total investment of $4.4 billion to establish a battery plant with an annual capacity of approximately 40 GWh. For comparison purposes, Tesla’s Gigafactory Nevada, which jointly produces battery cells and packs with Panasonic in Sparks, Nevada, had an annual output of 37 GWh in 2020.

LG Energy Solution and Honda will build pouch-type batteries at the joint venture facility, which could land in Ohio near Honda’s vehicle manufacturing plant. Pouch-type batteries differ from the traditional cylindrical design and are usually lighter weight and more flexible. They are also extremely safe and stable, but due to their design, there is a high possibility of leaking due to puncturing the cell or overheating. The development of pouch cells is usually more expensive than cylindrical cells.

The joint venture will begin to take shape after it is officially established later this year. Meanwhile, the plant’s construction is planned to begin in early 2023. Mass production is set to begin by the end of 2025.

LG Energy’s CEO, Youngsoo Kwon, said:

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“Our joint venture with Honda, which has significant brand reputation, is yet another milestone in our mid-to-long-term strategy of promoting electrification in the fast-growing North American market. Since our ultimate goal is to earn our valued customers’ trust and respect, we aspire to position ourselves as a leading battery innovator, working with Honda in achieving its core initiatives for electrification, as well as providing sustainable energy solutions to discerning end consumers.”

Additionally, President, CEO, and Representative Director of Honda, Toshihiro Mibe, said:

“Honda is working toward our target to realize carbon neutrality for all products and corporate activities the company is involved in by 2050. Aligned with our longstanding commitment to build products close to the customer, Honda is committed to the local procurement of EV batteries which is a critical component of EVs. This initiative in the U.S. with LGES, the leading global battery manufacturer, will be part of such a Honda approach.”

LG Energy Solution also has joint venture agreements with General Motors, and Hyundai, among others.

How the Inflation Reduction Act has brought EV battery plans to the U.S.

The establishment of the Inflation Act brought on a $430 billion climate, health care, and tax bill that focuses on bringing the transition to EVs closer to home. Vehicles built outside of North America will no longer be eligible for tax credits, the bill said. Electric vehicles offer considerable rebates and tax credits, most often worth $7,500, as long as the manufacturer has not already sold 200,000 electric units, according to current rules. Tesla, General Motors, and, most recently, Toyota have reached the 200,000-vehicle cap.

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According to Reuters, around 70 percent of the 72 current EV and plug-in hybrids on the U.S. market would no longer qualify for tax credits under the new rules. This has made those pushing for electrification efforts rethink their strategies as the United States is looking to make major changes in EV market share goals in a short period of time. California has already committed to selling its last new gas-powered vehicle in 2034, with a ban taking effect in 2035.

However, sourcing components and parts for EVs also will become a key factor in whether the vehicle qualifies for EV tax credits. By 2024, EV manufacturers are required to source at least half of their battery components in the United States or an allied country. By 2026, this number has to increase to 80 percent and will ultimately reach 100 percent in 2029, with all battery manufacturing taking place in North America.

These new stipulations have made manufacturers scramble their plans to align with the new Inflation Reduction Act, and will hopefully encourage automakers to make a more accelerated and deliberate change in terms of electrification plans.

I’d love to hear from you! If you have any comments, concerns, or questions, please email me at joey@teslarati.com. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.t

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Joey has been a journalist covering electric mobility at TESLARATI since August 2019. In his spare time, Joey is playing golf, watching MMA, or cheering on any of his favorite sports teams, including the Baltimore Ravens and Orioles, Miami Heat, Washington Capitals, and Penn State Nittany Lions. You can get in touch with joey at joey@teslarati.com. He is also on X @KlenderJoey. If you're looking for great Tesla accessories, check out shop.teslarati.com

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Tesla exec reveals shock development with Cybercab

“If we have to have a steering wheel, it can have a steering wheel and pedals.”

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(Credit: Teslarati)

Tesla is planning to launch the Cybercab in the second quarter of next year, and it is designed to be fully autonomous, so much so that the company is planning to build it without a steering wheel or pedals.

However, a Tesla executive said today that the company could ditch that idea altogether in what would be a major shift from the plans the company, and especially its CEO Elon Musk, have announced for the Cybercab.

Earlier today, Robyn Denholm, the company’s Chair for the Board of Directors, revealed that Tesla would potentially switch up its plans for the Cybercab based on potential regulatory requirements.

Credit: Tesla Europe & Middle East | X

Currently, even autonomous vehicles that operate for companies like Tesla and Waymo are required to have steering wheels and pedals. From a regulatory perspective, this could halt the plans Tesla has for Cybercab.

Denholm said in an interview with Bloomberg:

“If we have to have a steering wheel, it can have a steering wheel and pedals.”

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Interestingly, Musk and Tesla have not veered away from the idea that the vehicle will be without these operational must-haves.

Since the vehicle was revealed last October at the We, Robot event in Los Angeles, Tesla has maintained that the car would be built without a steering wheel or pedals, and would equip two seats, which is what is statistically most popular in ride-sharing, as the vast majority of rides have only one or two passengers.

Musk doubled down on the plans for Cybercab as recently as last week, when he said:

“That’s really a vehicle that’s optimized for full autonomy. It, in fact, does not have a steering wheel or pedals and is really an enduring optimization on minimizing cost per mile for fully considered cost per mile of operation. For our other vehicles, they still have a little bit of the horse carriage thing going on where, obviously, if you’ve got steering wheels and pedals and you’re designing a car that people might want to go very direct past acceleration and tight cornering, like high-performance cars, then you’re going to design a different car than one that is optimized for a comfortable ride and doesn’t expect to go past sort of 85 or 90 miles an hour.”

Cybercab is fully conceptualized as a vehicle that has zero need for pedals or a steering wheel because it is aimed toward being fully reliant on a Level 5 autonomous platform.

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Tesla is ramping its hiring for Cybercab vehicle manufacturing roles

Regulators could get in the way of this, however, and although the car could drive itself and be a great solution for ride-hailing, it might need to have these controls to hit the road in the future.

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SpaceX opens up free Starlink service for those impacted by Hurricane Melissa

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(Credit: Starlink | X)

SpaceX is opening up its internet service, Starlink, to those impacted by Hurricane Melissa, as it made landfall in Jamaica and the Bahamas as a Category 5 storm.

Hurricane Melissa is expected to reach wind speeds of over 165 MPH over the next few days as it extends out into the Atlantic Ocean by Thursday and Friday.

Citizens in Jamaica and the Bahamas have been preparing for the storm for the past week, getting necessary goods together and preparing for the massive storm to arrive. It finally did yesterday, and the first images and video of the storm are showing that it could destroy many parts of both countries.

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Starlink is now being opened up for free until the end of November for those impacted by the storm in Jamaica and the Bahamas, SpaceX announced today:

It is a move similar to the one the company made last year as Hurricane Helene made its way through the United States, destroying homes and property across the East Coast. SpaceX offered free service for those impacted by the destruction caused by the storm.

The free Starlink service was available until the end of 2024.

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Elon Musk’s companies have also made similar moves to help out those who are impacted by natural disasters. Tesla has offered Free Supercharging in the past, most notably during the California wildfires.

Tesla and SpaceX’s LA fire relief efforts: Cybertrucks, free Starlink and more

One major advantage of Starlink is that it is available for use in situations like this one, where power might be required to operate things like a modem and router.

Internet access is a crucial part of survival in these situations, especially as it can be the last leg some stand on to get in touch with emergency services or loved ones.

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Tesla board chair reiterates widely unmentioned point of Musk comp plan

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Credit: Tesla

Tesla Board Chair Robyn Denholm appeared on Bloomberg TV this morning to discuss the current status of CEO Elon Musk’s compensation plan, and used the opportunity to reiterate a widely unmentioned key point of the entire package.

Critics of the proposed pay package, which would pay Musk $1 trillion if he completes every tranche, routinely cite the sheer size of the payday.

Of course, many skeptics leave out the fact that he would only get that money if he were able to generate eight times the value the company currently has.

Tesla gains massive vote of confidence on compensation plan for Elon Musk

For Musk, it might have a little bit to do with money, but that is likely a very small percentage point of why the compensation package is being offered to him. He has reiterated that it is more about voting control and overall influence, especially as Tesla dives into robotics.

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He said during the Q3 Earnings Call:

“My fundamental concern with regard to how much voting control I have at Tesla is if I go ahead and build this enormous robot army, can I just be ousted at some point in the future? That’s my biggest concern. That is really the only thing I’m trying to address with this. It’s called compensation, but it’s not like I’m going to go spend the money. It’s just, if we build this robot army, do I have at least a strong influence over that robot army, not current control, but a strong influence? That’s what it comes down to in a nutshell. I don’t feel comfortable wielding that robot army if I don’t have at least a strong influence.”

Tesla shares the idea that Musk is a crucial part of the company, and without him being awarded the voting control he feels he deserves, he could leave the company altogether.

The company is very obviously feeling the importance of the upcoming vote, as it has advertised and pushed heavily for the comp plan to be approved, mostly to retain Musk.

Tesla Board Chair Robyn Denholm said today to Bloomberg TV that it is crucial shareholders understand it is not about Musk’s potential wealth, but more about his influence on company decisions:

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“So firstly, it is a performance package, so he gets nothing if he doesn’t perform against the pretty audacious milestones that are part of the performance criteria that’s been outlined by the board in the performance package. So, I think rather than compensation, it’s actually about the performance and the goals that we have for the company as we move forward. And so, for me, it really is about making sure that investors understand that they actually get paid if he hits the milestones before he will…Elon’s been very public, including on last week’s earnings call, about the fact that it’s around the voting influence that he could have in future shareholder meetings as opposed to the economic interests.”

Musk is not an incredibly flashy person. He does not have crazy cars or a massive house to go back to. He spends a lot of his time working and sometimes even sleeps at his office inside the factory.

He recently said he “only has what is needed” because “material possessions were making him weak.”

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