DEROIT — Honda Motor and yet-to-be-named joint venture partners plan to invest $11 billion in Ontario, Canada, to create a "comprehensive EV value chain," the Japanese automaker announced Thursday.
The company said the new North American electric vehicle epicenter will include new assembly and battery plants as well as other facilities to support production of all-electric and fuel cell-powered vehicles.
Honda said vehicle production will begin in 2028, with annual vehicle capacity of 240,000 units once it is fully operational. The investment in Alliston, Ontario, is expected to greatly assist in Honda's goal of exclusively offering all-electric and fuel cell-powered vehicles by 2040.
The timing of the investment may seem odd to industry onlookers and investors, as many automakers have announced pullbacks in their all-electric vehicle plans amid slower-than-expected adoption of EVs.
Honda said the investment is "for a future increase in EV demand in North America," with the battery plant capable of producing 36 gigawatt hours, or GWh, per year.
The project is expected to create as least 1,000 new jobs, adding to the 4,200 employees the company currently has at its two existing manufacturing facilities in Ontario.
Prime Minister of Canada Justin Trudeau said during a livestreamed press conference on Thursday that Honda's investment, 15 billion Canadian dollars, is the largest ever for the country's automotive industry. The company is expected to receive upward of CA$2.5 billion in assistance in tax credits and other incentives from the Canadian government, officials said.
The investment is a major win for Canada and comes after Honda last year confirmed a $4.4 billion investment for a new U.S. battery plant in Ohio.
"In North America, following the initiative to establish our EV production system capability in the U.S., we will now begin formal discussions toward the establishment of a comprehensive EV value chain here in Canada, with the support of the governments of Canada and Ontario," Honda CEO Toshihiro Mibe said in a release. "We will strengthen our EV supply system and capability with an eye toward a future increase in EV demand in North America."
Honda said it has "begun the process of evaluating the scope of its investment and completing negotiations with its joint venture partners." Its partner in the U.S. facility is LG Energy Solution.
The company said it expects to finalize the plans over the next six months.
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April 25, 2024 at 09:30PM
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Honda to build $11 billion electric vehicle hub in Canada - CNBC
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