Under Trump Tariff Pressure... Honda to Use Batteries from Toyota's US Plants

"Building a New Supply Chain"

In response to U.S. President Donald Trump's tariff hikes, Japanese automaker Honda has decided to source batteries from Toyota Motor's U.S. factories.

According to the Nihon Keizai Shimbun (Nikkei) on the 17th, Honda plans to procure hybrid vehicle (HEV) batteries from Toyota's factories in the United States starting April. Honda aims to purchase batteries for 400,000 vehicles annually from Toyota's plant located in North Carolina, U.S., to expand its hybrid vehicle sales.

Last year, Honda sold a total of 1.42 million vehicles in the U.S. market, of which 308,000 were hybrid vehicles. Previously, Honda imported batteries supplied by Japanese and Chinese companies to the U.S., but with President Trump raising tariffs on Chinese products and signaling reciprocal tariffs on Japan, supply chain adjustments have become inevitable.

Toyota plans to start shipping batteries from its North Carolina battery plant, which involves an investment of approximately $14 billion (about 20 trillion won), as early as next month. By supplying batteries to Honda, Toyota is expected to partially ease its investment burden, Nikkei reported.

Nikkei evaluated this as "the tariff risks under the Trump administration have shaken management strategies" and "an example of the Japanese automotive industry building a new supply chain." It added, "Honda estimates that if a 25% tariff is imposed on Canada and Mexico, it would face an impact worth 700 billion yen (about 6.8 trillion won) annually," and "Honda plans to move some production from Canada and Mexico to the U.S. and rebuild the U.S.-related supply chain to reduce the impact."

Automobiles account for about one-third of Japan's exports to the U.S. Last year, Japan's exports to the U.S. totaled 21.2951 trillion yen (about 207 trillion won), of which automobile exports amounted to 6.0261 trillion yen (about 59 trillion won), representing 28.3% of the total.