Honda Motor Company, a Japanese automaker, has recently made a significant decision to purchase batteries for its hybrid-electric vehicles manufactured in the US from its rival automaker, Toyota Motor Corporation. Reports from Japan this week, citing sources close to the company, indicate that Honda will be sourcing batteries from Toyota’s factory in North Carolina starting in the 2025 fiscal year, which commences next month. Shipments from the plant to Honda are expected to begin in April.
Up until now, Honda has been procuring batteries for its electrified vehicles made in the US from manufacturers located outside the country, mainly in Japan. However, with the new US government administration under President Donald Trump contemplating imposing import tariffs of 25% on major trading partners, Honda is looking to increase its local sourcing within the US.
This collaboration between Honda and Toyota for battery procurement is a rare occurrence and is anticipated to benefit both automakers. It will not only assist Honda in meeting its battery needs for its hybrid-electric vehicles but also enable Toyota to boost its output and capacity utilization at the US battery plant.
In 2024, Honda sold approximately 310,000 hybrid-electric vehicles in the US, accounting for over 20% of its total sales in that market. The company has set ambitious targets, aiming to double global hybrid vehicle sales, excluding China, to 1.3 million units by 2030.
This strategic move by Honda to source batteries from Toyota signifies a shift towards more localized supply chains in response to the changing trade landscape. It also showcases the potential for collaboration between competitors in the automotive industry to achieve mutual benefits and drive innovation.
As Honda and Toyota embark on this new partnership for battery procurement, the future looks promising for the advancement of hybrid-electric vehicles and sustainable mobility solutions in the US market. This collaboration not only highlights the importance of strategic alliances in the automotive sector but also underscores the industry’s commitment to embracing new technologies and meeting evolving consumer demands.
