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

LG

12/10/2022 23:20

By David Shepardson
       Oct 12 (Reuters) - The state of Ohio said on Wednesday
it plans to provide $71.3 million in tax credits for a new Honda
Motor Co Ltd  7267.T  and LG Energy Solution  373220.KS  joint
venture battery plant.
    On Tuesday, the companies announced they were committing to
invest $3.5 billion and creating 2,200 jobs, but said the
overall investment is projected to reach $4.4 billion. Honda
separately is investing $700 million and adding 300 jobs to
retool three Ohio plants to build EVs and parts.
    The Ohio Department of Development said the 30-year Job
Creation Tax Credit is performance-based and the company must
fulfill its job creation and payroll commitments to receive the
credit.
    The department said it is also working with the Ohio state
legislature "to invest $85 million in local water and
transportation infrastructure upgrades to ensure the success of
the project and benefit the local communities."
    It's not clear what local tax incentives the investments
will receive.
    The U.S. Congress in August approved billions of dollars in
tax incentives and grants for automakers to encourage increased
production of EVs and batteries in the United States. It also
approved new consumer tax credits to incentivize North American
battery and EV production.
    The two companies plan to begin construction in early 2023
and aim to complete the new facility about 40 miles (64
km)southwest of Columbus, Ohio, by the end of 2024.
    The plant aims to have approximately 40GWh of annual
capacity as it starts mass production of lithium-ion batteries
by the end of 2025.
 (Reporting by David Shepardson; Editing by David Gregorio)
 ((David.Shepardson@thomsonreuters.com; 2028988324;))