Honda reportedly is planning to team up with Toyota in order to secure a domestic supply of batteries for its U.S.-made hybrid vehicles.
Beginning in its upcoming fiscal year, Honda will buy hundreds of thousands of hybrid vehicle batteries made by a Toyota plant in the U.S., reports Nikkei.
Buying 400,000 Batteries
Honda intends to procure approximately 400,000 batteries from Toyota’s first overseas battery factory in central North Carolina — enough, Nikkei noted, to more than account for all the hybrid vehicles that Honda sells in the U.S. every year.
The almost $14 billion Toyota plant is expected to begin supplying hybrid vehicle batteries next month.
The Impact of Tariffs
Currently, Honda uses batteries made in Japan or China in its U.S.-assembled hybrids, but the costs of those batteries are poised to increase amid sweeping new tariffs imposed by the Trump administration.
Hybrid Sales Poised to Climb
The White House’s move to abandon federal support for electric vehicles, meanwhile, could also increase demand for hybrids, forecasters suggested.
Hybrids, according to the Nikkei report, accounted for more than one-fifth of Honda’s 1.42 million in U.S. vehicle sales last year, and the automaker hopes to dramatically increase those sales in North America and other markets by the beginning of the next decade.
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Image Source: Shutterstock / Ken Wolter
