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Honda, LG Ohio investments to receive $71 million state tax credit

The state of Ohio said on Wednesday it prepares to provide $71.3 million in tax credits for a new Honda Motor and LG Energy Solution joint venture battery plant.

On Tuesday, the companies said they were committing to invest $3.5 billion and create 2,200 jobs, but said the investment is projected to reach $4.4 billion.

Honda separately is spending $700 million and adding 300 jobs to retool three Ohio plants for building EVs and parts.

The Ohio Department of Development said the 30-year Job Creation Tax Credit is performance-based and the company should fulfill its job creation and payroll commitments to get the credit.

The department said it is also collaborating with the Ohio state legislature “to invest $85 million in local water and transportation infrastructure updates to ensure the success of the project and benefit the local communities.”

The U.S. Congress in August authorized billions of dollars in tax incentives and grants for automakers to support increased production of EVs and batteries in the country. It also authorized new consumer tax credits to incentivize North American battery and EV production.

The two companies plan to start construction in early 2023 and aim to finish the new facility about 40 miles (64 km)southwest of Columbus, Ohio, by the end of 2024.

The plant aims to have about 40GWh of annual capacity as it begins mass production of lithium-ion batteries by the end of 2025.

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