- Honda will source batteries for up to 400,000 hybrids from Toyota’s $14 billion plant.
- US President Trump recently hit Chinese goods with an additional 10% tariff.
- Honda has also decided to build the next Civic Hybrid in the US instead of Mexico.
Keen to avoid hefty new tariffs imposed by US President Donald Trump, Honda will source batteries for its hybrid vehicles from fellow Japanese automaker Toyota and its battery plant in North Carolina. Among the first vehicles to use these batteries will include the Honda CR-V, an unspecified SUV, and several other models.
Honda factories already operating in the United States currently source their hybrids’ batteries from Japan and China. However, Trump enacted a new 10% tariff on Chinese goods on February 4 and then hit them with another 10% on March 4. Additionally, he is expected to jack up tariffs on Japanese auto imports from 2.5% to 25%, forcing Honda to rethink its strategy.
Read: Toyota Quintuples Battery Production Capacity In North Carolina With $8 Billion Investment
According to Nikkei Asia, Honda will source enough batteries for approximately 400,000 hybrid vehicles in the US. These will come from Toyota’s $14 billion battery plant in North Carolina, which will begin production next month. While demand for EVs is growing, hybrid sales are also on the rise, and total US sales could hit 4.12 million by 2030.
Last year, Honda sold approximately 308,000 hybrid models in the States, representing 22% of the 1.42 million cars it delivered locally. By 2030, it wants to grow global hybrid sales to 1.3 million units, excluding China.
This isn’t the only move Honda is making to avoid Trump’s new tariffs. Earlier this month, it was revealed that the brand has decided it will build the next-generation Civic Hybrid in the United States, as opposed to Mexico which was the original plan. The company has said reciprocal 25% tariffs on Mexican and Canadian goods could cost it roughly $4.7 billion annually. It’s also planning to restructure its supply chain to lessen the impact of the new administration’s policies.
Toyota wants to ramp up production and sales of its hybrid models as well. In 2024, its electrified vehicles accounted for approximately 40% of total sales in North America, but it has a goal of pushing this up to 80% by 2030.
