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.