Japanese auto parts supplier Astemo is investing $379 million in two US plants to expand electric motor production, betting on rising North American demand for hybrid vehicles. The company, a joint venture between Hitachi and Honda, will add about 300,000 square feet (27,900 square meters) of production space at its facilities in Berea, Kentucky, according to Chinese automotive outlet Gasgoo.
Honda's hybrid pivot drives investment
The investment comes as Astemo's main customer, Honda, revises its electrification strategy. In May, Honda abandoned its previous target of making battery-electric vehicles (BEVs) and fuel-cell vehicles account for all sales by 2040. Instead, the automaker now plans to focus on hybrids, with 15 new-generation hybrid models slated for launch over three years starting in 2027.
The first phase of Astemo's investment totals $112 million and is aimed at boosting motor capacity. The expansion will be carried out in stages and could eventually create up to 282 jobs, Gasgoo reported.
Ownership shift on the horizon
Astemo develops and produces a range of automotive systems, including chassis and powertrain hardware and software, as well as autonomous driving and advanced driver assistance systems (ADAS). Honda currently holds a 40% stake in Astemo, Hitachi holds 40%, and JIC Capital owns the remaining 20%.
Honda plans to acquire an additional 21% of Astemo from Hitachi, a deal expected to close by the end of 2026. After the transaction, Honda's stake will rise to 61%, Hitachi's will drop to 19%, and JIC Capital will retain its 20%.
The Kentucky expansion reflects a broader industry trend as automakers recalibrate their electrification timelines. While BEV sales continue to grow globally, hybrids are proving more popular in North America, where charging infrastructure remains uneven and consumers show preference for familiar powertrain technology.
Astemo's investment signals that suppliers are adapting to shifting demand patterns, with hybrid-specific components like e-motors becoming a growth area even as some automakers delay their full-electric ambitions.
