The Strict Tariff policy that Trump has levied has become a new issue for manufacturers. Ina recent development it has become apparent that Honda would start procuring batteries from Toyota in a bid to circumvent the tariff restrictions. The batteries are meant for the Hybrid vehicles that the brand produces. The batteries would be used for Honda’s Hybrid vehicles that would be sold in the USA.
As per a recent report by Reuters from the up coming financial year Honda would be suing Toyota’s US made batteries for about 400,000 vehicles which will be enough for all of the Hybrid cars it currently sells. Honda has not yet released any press releases or announced the new decision.
Before Tariffs
Before the tariffs, Honda was procuring the batteries for their new vehicles from Japan and China. But as of now the brand is planning to face the potential tariffs under Trump. Hence Honda has been planning to source the batteries from Toyota in the US.
Beyond the battery procurement the brand is also planning to facilitate other plans as well. Hence Honda has decided to develop the next generation Civic Hybrid in the US state of Indiana instead of Mexico to avoid tariff restrictions. Honda is one of the biggest providers of Hybrid vehicles in the US.
Trump’s Further Crackdown On The Imports
Automakers have been streamlining their supply chains after Trump has introduced a 10% increase in February beyond the additional 10% tariff that was introduced on imports from China. Beyond that Mexico and Canada are other two locations that Honda cannot shift their focus from. To mitigate the risks Honda has planned to partner with Toyota to utilize the Hybrid Battery technologies.
Also Read: India’s Motorcycle Parts Exports Soar! How The PLI Scheme Is Fueling The Growth
