Enlarge / Between 2024 and 2027, Honda plans to sell many new EVs in North America, starting with this, the Prologue.

A key component of the revised electric vehicle tax credit is a requirement for an ever-increasing amount of domestic content in those EVs' battery packs. Automakers and battery manufacturers were already in the process of setting up US manufacturing to be closer to locally built EVs, and that trend has accelerated ever since.

At the end of August, Honda and LG Energy Solutions announced that they were forming a joint venture to build a US battery factory. And on Tuesday, the pair announced that the factory would be in Fayette County, Ohio, about 40 miles (64.4 km) southwest of Columbus.

Honda and LG will spend $3.5 billion on the new plant after regulatory approval. Assuming that happens relatively rapidly, the plan is to begin construction in 2023 and finish the building work by the end of 2024. Honda said that by the end of the following year, the factory should have an annual capacity of 40 GWh. Honda and LG also said the factory should create 2,200 jobs in the area.

Enlarge / A Honda worker assembles a battery pack. (credit: Honda)

North American lithium-ion battery production is set to soar over the next decade. The Biden administration and Congress have both put policies in place to incentivize domestic manufacturing over imports, and startups, battery companies, and automakers are responding. Honda and LG Energy Solutions are the most recent to make moves; on Monday morning, the companies announced that they are forming a $4.4 billion joint venture to build a US battery factory.

"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," said Youngsoo Kwon, CEO of LG Energy Solution. "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."

In May, the Department of Energy announced $3 billion in funding to boost domestic battery production . Much of that battery production will be destined for electric vehicles, particularly since President Joe Biden signed the Inflation Reduction Act into law this month. The law ties an EV's tax credit to where its battery pack was made —if an ever-increasing proportion of the pack is not domestic, there is no credit.

Enlarge / Ford's electric F-150 Lighting (L), eTransit (M), and Mustang Mach-E (R) battery-electric vehicles have all been such successes that they're all sold out for the rest of the year. (credit: Ford)

On Thursday, Ford Motor Company announced that it has secured 60 GWh of battery cells that will allow it to build 600,000 electric vehicles by late 2023. And it says it has contracts for cells that will allow it to build 1.4 million EVs by 2026, 70 percent of the 2 million EVs it plans to build globally that year.

"Ford's new electric vehicle lineup has generated huge enthusiasm and demand, and now we are putting the industrial system in place to scale quickly," said Jim Farley, Ford’s president and CEO and president of Ford Model e. "Our Model e team has moved with speed, focus, and creativity to secure the battery capacity and raw materials we need to deliver breakthrough EVs for millions of customers."

The automaker says that its plan for 2023 will consist of 270,000 Mustang Mach-Es for North America, Europe, and China, 150,000 F-150 Lightnings for North America, 150,000 e-Transit vans for North America and Europe, and it will launch an additional electric SUV in Europe, building 30,000 in 2023 before ramping up production significantly in 2024.