Honda To Buy Toyota Hybrid Car Batteries for U.S. Market

Honda Motor Co. plans to procure batteries for hybrid vehicles to be sold in the U.S. from a Toyota Motor Corp. plant in the country, as part of efforts to realign its supply chain amid the threat of tariffs imposed by U.S. President Donald Trump, sources familiar with the matter said Tuesday, Kyodo News reported.

Demand for hybrid cars is rising in the U.S., especially as sales of electric vehicles (EVs) slow. I Photo: Toyota

The Tokyo-based company aims to purchase batteries produced at Toyota's factory in North Carolina starting in 2025.

The plant is expected to begin shipments in April. Previously, Honda has sourced batteries from manufacturers in Japan and other regions outside the U.S., shipping them for use in its production facilities there.

This rare collaboration between Japan’s two largest automakers comes as the global auto industry grows increasingly wary of Trump’s trade policies, including a proposed 25% tariff on auto imports.

By securing batteries domestically, Honda can avoid the burden of additional tariffs, while Toyota benefits from increased production output, which could lower manufacturing costs.

Demand for hybrid cars is rising in the U.S., especially as sales of electric vehicles (EVs) slow. Trump has also begun rolling back his predecessor Joe Biden’s clean-energy initiatives, instead advocating for increased U.S. oil production.

In 2024, Honda sold approximately 310,000 gasoline-electric hybrid vehicles in the U.S., accounting for over 20% of its total U.S. sales. The company has stated its goal of doubling global hybrid sales—excluding China—to 1.3 million units by 2030, compared to 2023 levels.