Honda Asks Toyota For Help Avoiding Tariffs
Honda plans to procure batteries for its hybrid vehicles from Toyota’s U.S. battery plant. The reported move is seen as a strategy to mitigate potential tariff risks under the Trump administration.
Key Points
- Toyota will provide batteries for approximately 400,000 Honda hybrid vehicles sold in the U.S. starting in fiscal 2025.
- Honda is moving away from Japanese and Chinese battery suppliers to mitigate the impact of new tariffs under the Trump administration.
- The $14 billion facility will manufacture the batteries, helping Toyota establish itself as a major supplier while supporting its plan to increase electrified vehicle sales in North America.
Beginning in fiscal 2025, Toyota will supply batteries for Honda’s hybrid vehicles sold in the U.S., an agreement that could cover approximately 400,000 vehicles per year, according to Nikkei. Currently, Honda sources its hybrid batteries from Japan and China.
The move comes as Honda’s electrified lineup—including hybrids and EVs—accounts for a growing share of its U.S. sales. In 2024, the company sold over 308,500 hybrids and 40,400 electric vehicles. A Honda spokesperson stated that the company has not disclosed details regarding its parts suppliers, while Toyota declined to comment.
Both the Honda CR-V Hybrid and Civic Hybrid are produced at Honda's plant in Alliston, Ontario, serving as the global lead plant for both hybrid vehicles. The Accord is produced at Honda's plant in Marysville, Ohio.
The batteries will be manufactured at Toyota’s new North Carolina battery plant, a $14 billion facility that spans over seven million square feet. The site is Toyota’s first in-house battery production hub outside Japan.
With tariffs on imports from Japan set to increase from 2.5% to 25%, and additional costs looming on Mexican and Canadian imports, manufacturers are looking to limit exposure to added expenses. Industry estimates suggest these tariffs could cost Japanese automakers $20 billion in the U.S. alone, with Honda facing a potential $4.7 billion impact.
The decision squares with Honda’s recent moves to insulate itself from a potential tariff war. Earlier this month, reports indicated that the company plans to manufacture the next-generation Civic Hybrid in Indiana instead of Mexico to avoid potential trade penalties on one of its best-selling models.
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An experienced automotive storyteller and accomplished photographer known for engaging and insightful content. Michael also brings a wealth of technical knowledge—he was part of the Ford GT program at Multimatic, oversaw a fleet of Audi TCR race cars, ziptied Lamborghini Super Trofeo cars back together, been over the wall during the Rolex 24, and worked in the intense world of IndyCar.
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