Honda China, Dongfeng Motor, GAC Group to build battery procurement joint venture

Shanghai (Gasgoo)- Honda Motor (China) Investment Co., Ltd. ("Honda China") announced today it had signed an agreement with its two Chinese partners, namely Dongfeng Motor Group Company Limited ("Dongfeng Motor") and Guangzhou Automobile Group Co., Ltd. (“GAC Group”), on August 31 to build a joint venture dedicated to power battery procurement at the end of September this year.

Named HDG (Beijing) Trading Service Co., Ltd. ("HDG"), the soon-to-be-launched joint venture will be registered in Beijing. Honda China, Dongfeng Motor, and GAC Group will invest in the joint venture at a ratio of 50:25:25.

Meanwhile, Honda China also inked an MoU (memorandum of understanding) with CATL to deepen their strategic cooperation, in a bid to build a long-term stable power battery supply-demand mechanism.

Currently, GAC Honda and Dongfeng Honda purchase EV batteries from CATL separately. In the future, the battery procurement of both joint ventures will be managed by HDG.

Based on CATL's Yichun factory, which is still under construction, Honda will have talks with the battery giant for businesses like intensive production and battery recycling, seeking a more efficient logistics system and a long-run stable power battery supply.

In 2022, Honda and CATL form all-around strategic collaboration in such fields as development, stable supply, and recycling of power batteries.

The Japanese automaker plans to introduce 10 e:N series all-electric vehicle models in China by 2027.