POSCO Future M to Pursue Cathode Material Joint Venture with Japan's Honda in Canada

Signing of MOU for Joint Venture Establishment
Foundation for Partnership Expansion

POSCO Future M is entering a joint venture with Japanese automaker Honda for cathode active materials, a key battery component. This is the second joint venture with an automaker following GM.

Toshihiro Mibe, CEO of Honda, announced on the 25th (local time) along with Canadian Prime Minister Justin Trudeau and other key Canadian government officials that they will build a new electric vehicle factory and an electric vehicle battery plant in Canada worth 15 billion Canadian dollars (approximately 15 trillion KRW). He also stated plans to establish a cathode active material joint venture with POSCO Future M to secure the local supply chain.

Accordingly, the two companies signed a memorandum of understanding (MOU) to establish a cathode active material joint venture in Ontario, Canada. The cathode active materials produced by the joint venture will be supplied for electric vehicle batteries manufactured by Honda in North America. The companies aim to finalize the contract within this year.

A POSCO Future M official explained, "We have secured Honda, which is pushing to establish an annual production system of over 2 million electric vehicles by 2030, as a new customer and expanded our strategic partnership."

POSCO Group and Honda agreed last April to collaborate in areas such as cathode and anode materials and next-generation batteries. Since then, they have maintained close consultations and agreed on the necessity of producing cathode active materials locally to establish a stable supply chain, as cathode materials determine battery performance and cost, in order to secure a competitive edge in the rapidly growing North American electric vehicle market. This consensus led to the joint venture.

The two companies expect to secure new growth momentum by combining POSCO Future M’s high-quality battery materials with Honda’s automotive technology to supply electric vehicles with innovative performance and reliability to the North American market.

POSCO Future M is recognized globally for its raw material procurement capabilities, technology, and mass production capacity, being the first domestic battery material company to enter the North American local market through a joint venture with an automaker. In July 2022, POSCO Future M established the cathode active material joint venture Ultium CAM with the U.S. automaker GM in Quebec, Canada, which is scheduled for completion in the second half of this year.

However, due to recent sluggish demand for electric vehicles, POSCO Future M plans to delay short-term investments in its existing secondary battery material business. The company announced adjustments to its investment plans for cathode and anode material production capacities the day before.

Originally, the plan was to increase cathode active material production capacity to 445,000 tons by 2026, but this was revised down to 395,000 tons. The anode material production capacity plan was also lowered from 221,000 tons to 113,000 tons by 2026. However, the previous plan to achieve production capacities of 1 million tons of cathode active materials and 370,000 tons of anode materials by 2030 remains unchanged.