Honda Motor Company has announced its Chinese unit will establish a joint venture with Dongfeng Motor Group and Guangzhou Automobile Group Co at the end of the month to procure batteries for fully electric vehicles.
The automaker’s Chinese division also agreed to strengthen its existing partnership with CATL, the world’s largest battery maker, to ensure a stable supply of batteries, it said in a statement on Wednesday.
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At present, Honda’s joint ventures to manufacture and sell four-wheel vehicles in China, Dongfeng Honda and Guangqi Honda, receive their batteries separately from CATL.
The latest change, however, will allow battery procurement to be centralised through the soon-to-be-launched joint venture to increase efficiency.
Honda will invest 50 percent into the joint venture while Dongfeng and Guangzhou will each invest 25 percent into it.
The Japanese automaker said on Tuesday it had formed a partnership with trading company Hanwa Co to secure a stable supply of metals used in batteries for electrified vehicles.