As Honda evaluates a potential merger with Nissan, the automaker is reportedly seeking an alternative strategy to bypass U.S. import tariffs. A key part of this plan involves purchasing hybrid batteries from Toyota’s upcoming North Carolina facility instead of sourcing them from overseas.
According to a report by Japanese newspaper Nikkei, Toyota has agreed to supply Honda with 400,000 battery packs annually, beginning in the 2025 fiscal year, which starts in April. This coincides with the launch of Toyota’s $14 billion battery manufacturing plant in North Carolina. The agreement, while significant, is not a strategic alliance. Honda will simply purchase the batteries from Toyota, with no reciprocal arrangement in place.
By securing a domestic supply of hybrid batteries, Honda aims to insulate itself from escalating tariffs imposed by the U.S. government. The company sold approximately 308,000 hybrid vehicles in the United States last year and intends to expand that number in the coming years. While specific models set to receive Toyota’s batteries remain undisclosed, industry speculation suggests that the popular CR-V hybrid could be among the first beneficiaries.
