Honda considering $18.4 bn investment in Canadian electric vehicle plant
January 8, 2024 6:30 pm
January 8, 2024 6:30 pm
Major investment considered for Canadian electric vehicle plant, Emphasising renewable energy and market opportunities.
According to a report from a Japanese news outlet, Honda Motor Co. Ltd. is contemplating an investment of over $18.4 billion in an electric vehicle plant in Canada. Nikkei Asia stated on Sunday that Honda is exploring the possibility of constructing both a vehicle and battery plant in the country as part of its efforts to compete in the electric vehicle market. The report indicates that Honda is assessing various locations, including one next to its existing plant in Alliston, Onterio, and a decision on potential investment is anticipated by the end of the year. While a Honda Canada spokesman acknowledged the company’s exploration of various initiatives to enhance electric vehicle production, he did not officially confirm the details outlined in the Japanese report.
“In order to achieve our 2040 electrification target of 100 per cent electrified vehicles, we are considering various options to increase local production capacity, however, we have nothing further to share at this time,” John Bordignon said in an email.
A spokesperson for Industry Minister François-Philippe Champagne did not confirm whether any talks were going on between the company and the government.
The minister said in a statement that the report about Honda’s potential investment is a “testament to Canada’s growing reputation as a green supplier of choice and global EV leader.”
According to the Nikkei report, Honda is considering Canada for its electric vehicle plant, citing the country’s abundant renewable energy as a contributing factor. In December, the federal government mandated that all passenger vehicle sales must be electric by 2035.
While Honda is retooling a production plant in Ohio to manufacture electric vehicles and has a standing agreement with LG Energy Solution to construct an electric vehicle battery plant in the state, the report suggests that the company may independently pursue the battery plant in Canada. LG has already partnered with automaker Stellantis to build a $5 billion battery plant in Windsor, Ont., part of several substantial electric vehicle investments secured by Canada through generous subsidies.
Volkswagen is in the process of constructing a battery plant in St. Thomas, Ontario, and Northvolt is building one approximately 30 kilometers east of Montreal. These three plants are expected to receive tens of billions of dollars in subsidies, largely tied to production volumes.
In 2022, Honda announced a $1.38 billion investment to upgrade its Alliston plant, preparing it to be the lead plant for its CR-V hybrid crossover vehicle. The company is set to launch its first fully electric vehicle in Canada, the Prologue, this year, with limited quantities expected in the initial production year.