Honda, LG Energy to build $4.4 billion battery plant in U.S., Rivian to start RS1 deliveries
Yahoo Finance's Pras Subramanian discusses the latest EV news from Honda, LG Energy, and Rivian.
BRIAN SOZZI: Honda is betting big on EVs as it announces a deal with battery maker LG Energy Solution to build a $4.4 billion battery plant in the US. Yahoo Finance Senior Auto Correspondent Pras Subramanian joins us with the details. Pras
PRAS SUBRAMANIAN: Hey. So yeah, $4.4 billion. Big deal here at LGES, is which is LG Energy Solutions and Honda. Excuse me. But the reason why you're going be hearing more and more about these is that there is a $35 per kilowatt hour tax credit in the IRA that was signed. And this is kind of big for these manufacturers. There's a big incentive to build these batteries.
I was speaking to Jim Farley at Pebble Beach this week and he said, you know, it wasn't actually the consumer tax rate that's a big deal to the IRA. It's actually the battery tax credit. Because doing some back of the hand math, if you're making 40 gigawatt hours at the Honda plant, that's around $1.2 billion in tax credit just going to your bottom line. That's a big incentive, so you're going to see more and more of these factories come to the US, I would expect.
BRAD SMITH: Pebble Beach with Ford CEO Jim Farley.
BRIAN SOZZI: [INAUDIBLE]
BRAD SMITH: A big burden, there. A tough assignment. In some other--
PRAS SUBRAMANIAN: [INAUDIBLE]
BRAD SMITH: In other news in the EV space as well, Rivian, we know, is also reportedly beginning deliveries of its R1S vehicle to the customers out there that have orders in.
PRAS SUBRAMANIAN: Yeah, you know, the first non-employee deliveries happening. Electrek and other blogs talking about that. And it's another big thing for-- I guess it's a good positive first step for Rivian now. That it had a decent second quarter earnings report, other than the fact they-- [INAUDIBLE] as you noted-- they expanded their annual loss for the year.
But they're actually making more cars. They already made around 8,000 trucks so far. They're delivering the R1 SSUV. They hit their internal deadline of August for these R1 SSUVs, but even though last year they sort of pushed that back. So they're slowly creeping along, slowly getting these trucks out. The big question is can they start making them profitably in the future?