Honda & Toyota Deal

there are batteries in North Carolina and cars that need batteries in Ohio. Toyota is building a $14 billion battery factory in North Carolina which it says will have 14 production lines, including four supporting battery production for hybrid vehicles and ten supporting battery production for battery electric vehicles and plug-in hybrid electric vehicles. That’s all fine and dandy, but Toyota won’t need all those batteries for its own vehicles until sometime in the middle future. So who is going to buy all those batteries from Toyota?

Honda. According to Yahoo!, in an unexpected move to navigate the shifting landscape of US tariff rules, Honda will buy batteries for its hybrid offerings from Toyota. The deal, first reported by the Japanese newspaper Nikkei, allows Honda to sidestep hefty import tariffs on components sourced from China and Japan while giving Toyota’s North Carolina battery plant an early win.

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Nothing new under the sun. Companies have been trading engines, transmissions, and other components since before there was dirt. A coworker of mine had a GM Saturn Vue SUV, that had a Honda engine. The current Jeep Compass has a Hyundai transmission. The Mercury division of Ford sold a minivan it bought from Nissan. VW sold a minivan that was a rebadged Dodge Caravan. If you bought a 1972 AMC Ambassador, you got a Chrysler transmission, GM power steering, and a Ford distributor.

Steve

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