Honda, the Japanese automaker, has announced a historic investment of $11 billion (CAD$15 billion) in Ontario, Canada to build four new electric vehicle (EV) plants and a battery factory. This investment marks Honda's largest ever in Canada and is expected to create at least 1,000 new jobs in addition to the current 4,200 employees in Ontario.
The new facilities will enable the production of 240,000 Honda EVs annually once fully operational. Honda aims for EVs and fuel cell vehicles (FCEVs) to account for 100% of its vehicle sales by 2040. The battery plant is capable of producing 36 gigawatt hours per year.
The investment comes as the global demand for electric vehicles has slowed down, but Honda expects this supply network to help it achieve its goal for all North American sales to be either EVs or FCEVs by 2040. The project is expected to greatly assist in reducing costs by over 20% compared to current methods.
The new Honda EV plant and battery factory will be constructed adjacent to the existing facilities in Alliston, Ontario. In addition, Honda plans for essential EV components production through joint ventures with companies such as Asahi Kasei and POSCO. The operations are targeted to start by 2028.
Prime Minister of Canada Justin Trudeau said the investment is a 'game changer for manufacturing in Canada.' Honda's investment is expected to receive upward of CA$2.5 billion in assistance from the Canadian government, including tax credits and other incentives.
Honda has also announced plans to work with South Korean steel giant POSCO for the production of battery cathode materials and with Asahi Kasei to make separators. By handling everything from material development to vehicle assembly in Ontario, Honda expects to reduce costs by more than 20% from current methods.
Canada has been wooing companies involved in all parts of the EV supply chain as part of its efforts to bolster its manufacturing heartland in Ontario and keep air clean. North America accounts for approximately 30% of Honda's global four-wheeled vehicle sales.
