The new joint venture will handle battery procurement for Honda's two joint ventures in China, instead of the two companies buying batteries from separately as they did before.

(Image credit: Honda China)

Japanese auto giant Honda will set up a new joint venture in China with two of its major local partners to facilitate its access to electric vehicle (EV) battery supplies.

Honda China announced today that it signed an agreement on August 31 with Dongfeng Motor and GAC Group to set up HDG (Beijing) Trading Service Co Ltd, a joint venture dedicated to power battery procurement, by the end of September.

Honda China will hold a 50 percent stake in the joint venture, with Dongfeng and GAC each holding a 25 percent stake. Honda currently has two joint ventures with these two Chinese automakers -- Dongfeng Honda and GAC Honda.

Honda China also signed a strategic cooperation memorandum with Chinese power battery giant CATL to build a long-term stable power battery supply relationship, it said.

In the future, Dongfeng Honda and GAC Honda's battery supply will be sourced by the new joint venture, rather than by them separately from CATL as before, to enhance efficiency, Honda China's press release said today.

Honda and CATL will cooperate in areas such as intensive production and battery recycling based on the latter's Yichun plant in Jiangxi province, which is under construction, to ensure a stable long-term supply of power batteries, it said.

In 2020, Honda and CATL signed a strategic cooperation agreement on power batteries, covering areas including joint development, supply, recycling and reuse of power batteries.

The establishment of this new company will further strengthen the strategic partnership between Honda and CATL to secure battery supply for the expansion of Honda's new e:N brand pure electric vehicle product lineup, the Japanese automaker said.

Honda plans to launch 10 e:N brand pure electric vehicles to China by 2027, it said, adding that GAC Honda and Dongfeng Honda are undertaking the construction of new EV plants to fully accelerate the push for electrification.

On October 13 last year, Honda, together with GAC Honda and Dongfeng Honda, held a joint launch event for the company's electrification efforts in China, officially launching the e:N brand.

On April 27 this year, Dongfeng Honda's e:NS1 was officially launched in China, making it Honda's first pure electric vehicle model in China. On June 20, GAC Honda's first EV model, the e:NP1, was officially launched in China.

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