In an announcement made on Thursday, Honda Motor, alongside its yet-to-be-disclosed joint venture partners, revealed plans to invest $11 billion in Ontario, Canada, to establish a “comprehensive EV value chain.” The initiative aims to establish a new North American electric vehicle hub, incorporating the construction of assembly and battery plants, alongside other facilities, to facilitate the production of all-electric and fuel cell-powered vehicles.
Honda has announced that vehicle production is scheduled to commence in 2028, with an anticipated annual capacity of 240,000 units once operations reach full capacity. This significant investment in Alliston, Ontario, is poised to significantly bolster Honda’s objective of transitioning to a lineup exclusively comprising all-electric and fuel cell-powered vehicles by 2040. The timing of this investment might raise eyebrows among industry observers and investors, given that several automakers have recently scaled back their plans for all-electric vehicles due to slower-than-anticipated adoption rates of EVs.
Honda stated that the investment aims to cater to the anticipated surge in EV demand in North America. The battery plant is designed to have a production capacity of 36 gigawatt hours (GWh) per year. This initiative is projected to generate at least 1,000 new job opportunities, supplementing the workforce of 4,200 employees currently employed at the company’s two existing manufacturing facilities in Ontario.
During a live-streamed press conference on Thursday, Canadian Prime Minister Justin Trudeau announced that Honda’s investment, totaling 15 billion Canadian dollars, marks the largest ever in the country’s automotive industry. Officials stated that the company is poised to receive upwards of CA$2.5 billion in assistance, including tax credits and other incentives from the Canadian government. This substantial investment stands as a significant victory for Canada, particularly following Honda’s confirmation last year of a $4.4 billion investment for a new U.S. battery plant in Ohio.
“In North America, subsequent to the initiative to develop our EV production system capability in the U.S., we are now initiating formal discussions aimed at establishing a comprehensive EV value chain here in Canada, with the support of the governments of Canada and Ontario,” stated Honda CEO Toshihiro Mibe in a release. “We are committed to enhancing our EV supply system and capabilities, with a focus on meeting the anticipated rise in EV demand in North America.”
Honda announced that it has commenced the process of assessing the extent of its investment and finalizing negotiations with its joint venture partners. LG Energy Solution is the company’s partner in the U.S. facility.
