Honda Motor Co., Ltd. announced that it plans to build a comprehensive electric vehicle value chain in Canada with an approximate investment of $15 billion, including investment by joint venture partners, to strengthen its EV supply system and capability to prepare for a future increase in EV demand in North America.

“Today’s announcement is a game changer for manufacturing in Canada. Honda’s investment is a vote of confidence in Canada, in Canadian auto workers, and in our manufacturing sector. Together, we’re creating good-paying jobs, growing our economy, and keeping our air clean,” said Justin Trudeau, Prime Minister of Canada.

The proposed Honda EV value chain will also include a cathode active material and precursor (CAM/pCAM) processing plant through a joint venture partnership with POSCO Future M Co., Ltd.  and a separator plant through a joint venture partnership with Asahi Kasei Corporation, with announcements to follow in their respective Ontario communities.

“Honda is making progress in our global initiatives toward the realization of our 2050 carbon neutrality goal,” said Toshihiro Mibe, Global CEO of Honda. “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. We will strengthen our EV supply system and capability with an eye toward a future increase in EV demand in North America.”

Honda expects that electric vehicle production will begin in 2028.  Once fully operational, the EV plant will have a production capacity of 240,000 EVs per year and the EV battery plant will have a capacity of 36 GWh per year.  In addition to securing the current employment level of 4,200 associates at its two existing manufacturing facilities in Ontario, Honda estimates it will add a minimum of 1,000 new associates for the EV and EV battery manufacturing facilities.  The investment in the new facilities will also create significant spinoff jobs across all sites, including in the construction sector.

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Honda has begun the process of evaluating the scope of its investment and completing negotiations with its joint venture partners.  This work is expected to be finalized during the next six months and more details will be shared at that time.

To support this project, Honda is collaborating with the governments of Canada and Ontario to drive innovation in low-emissions manufacturing by accessing performance-based initiatives available through the federal government’s new Investment Tax Credits and provincial direct and indirect incentives.

North American EV strategy

Striving to realize carbon neutrality for all its products and corporate activities by 2050, Honda has set a goal to make BEVs and FCEVs represent 100 per cent of vehicle sales by 2040. To achieve this goal, Honda will continue offering attractive products in this electrified era globally, including its largest market of North America.

As the first step in achieving this electrification goal in North America, Honda positioned its existing auto production plants in the state of Ohio in the U.S. as its EV Hub for production, including the retooling of existing plants, an investment of USD$700 million, and the construction of a joint venture EV battery plant with LG Energy Solution, with an expected investment of USD$4.4 billion.

The Ohio EV hub will serve as the foundation for future EV and EV battery production, sharing knowledge and expertise with other Honda plants in North America, including the new EV assembly and battery plants in Ontario, Canada. Honda expects EV production to begin at the Marysville Auto Plant in late 2025.

As a second step in this initiative, Honda will strive to establish a comprehensive EV value chain that includes all aspects of EV production in Canada, from the procurement of raw materials mainly for batteries, to the production of finished EVs.  Honda will leverage EV production knowledge learned at the Ohio EV Hub, combined with the abundant resources and clean energy available in Canada, to establish a stable supply system for batteries, the key component of EVs, and increase cost competitiveness of its EVs as a whole.

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Furthermore, with an eye toward secondary use and the recycling of batteries, Honda will realize low-carbon value creation throughout the entire battery life cycle, through which Honda will establish a highly profitable business foundation and contribute to the realization of a carbon-neutral society.

“Today’s announcement is a historic investment by a manufacturer in the Canadian auto industry,” said Jean Marc Leclerc, president and CEO of Honda Canada Inc. “It proudly honours the highly skilled associates who have earned a global reputation for manufacturing excellence and represents Honda’s recognition of the long-term attractiveness of the Canadian electric vehicle manufacturing ecosystem.”

In Budget 2024, the federal government announced its intention to introduce the new 10 per cent electric vehicle (EV) Supply Chain investment tax credit, to attract investment across at least three supply chain segments:

    • EV assembly.
    • EV battery productions.
    • Cathode active material production.

It is estimated that Honda’s new investments in eligible EV supply chain segments could benefit from federal support in the range of $2.5 billion through the proposed EV Supply Chain investment tax credit and the proposed Clean Technology Manufacturing investment tax credit.

For further information on this project, visit www.hondacanadamfg.ca.

Featured image, from left to right: Ontario Premier Doug FordToshihiro Mibe, president and CEO of Honda Motor Co.; and, Prime Minister Justin Trudeau. They make the announcement at Honda of Canada Mfg., in Alliston, Ont. on April 25, 2024. Credit: YouTube/Screen Capture.

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