Honda's $11B EV Battery & Vehicle Plant Coming to Canada

Honda, a Japanese automobile titan, has unveiled plans for the most substantial automotive investment in Canada's history. The company intends to invest a staggering Can$15 billion (US$11 billion) into developing a new EV battery and vehicle assembly plant.

Prime Minister Justin Trudeau and other officials hosted a joint news conference where they made this groundbreaking announcement. Honda's chief executive officer, Toshihiro Mibe, revealed that this new assembly line will begin producing electric vehicles (EVs) in 2028.

Upon completion and full operation, the factory is projected to have an impressive capacity to manufacture 240,000 vehicles annually while simultaneously producing 36 GWh worth of batteries per year.

"The world is changing rapidly, and we must work toward realizing carbon neutrality to sustain the global environment," Mibe declared during his address.

The upcoming facility will be strategically located adjacent to Honda’s existing Civic and CR-V assembly plants situated north of Toronto. Expected to create approximately 1,000 new jobs, this development promises significant employment opportunities, augmenting Honda's current workforce of 4,200 employees.

Prime Minister Trudeau expounded on Ottawa's concerted efforts towards establishing "a whole ecosystem" around electric battery production. He emphasized how these initiatives, coupled with attractive tax incentives, access to renewable energy resources, and rare mineral deposits, make Canada an increasingly appealing destination for EV investments.

"Because of the choices our government has made over the past few years, Canada now ranks first globally in Bloomberg's ranking of lithium-ion battery supply chains," stated Trudeau, proudly emphasizing Canada’s leading role in green technology advancement.

Ontario Premier Doug Ford also highlighted his province's pivotal role in escalating the electric vehicle revolution, given that six major automakers maintain headquarters there, including Honda itself.

In its recent budgetary provisions, Trudeau’s government introduced novel business tax credits, offering companies a generous rebate amounting to up to ten percent on construction costs associated with new facilities in the electric vehicle supply chain.

The province has committed an additional Can$2.5 billion in incentives, and the federal government projects a tax credit of Can$2.5 billion for Honda's upcoming facility.

Over the past four years, automotive and battery manufacturers have collectively invested more than Can$31 billion in electric vehicle manufacturing across Canada.

Canada’s strategic approach aligns perfectly with that of its neighboring United States, which has been incentivizing green industry through its Inflation Reduction Act.

Since 2021, Honda has made significant strides by investing heavily, with the clear objective of achieving total electrification within its automobile segment by 2040.

The Alliston-based plant will be the first to take advantage of Canada's EV supply chain investment tax credits, joining the recently announced Volkswagen and Stellantis battery plants on this path.

In addition, Honda plans to establish a cathode active material and precursor processing plant alongside a separator plant through joint ventures with chemical companies POSCO Future M and Asahi Kasei, thereby completing their local EV supply chain.