A brand new Honda Pilot is displayed on the sales lot at Honda Marin on February 6, 2024 in San Rafael, California.
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DEROIT – Honda engine and yet-to-be-named joint venture partners plan to invest $11 billion in Ontario, Canada, to create a “complete value chain for electric vehicles,” 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 fully electric and fuel cell-powered vehicles.
Honda said vehicle production would begin in 2028, with an annual capacity of 240,000 units once it is fully operational. The investment in Alliston, Ontario, is expected to greatly contribute to Honda’s goal of offering exclusively fully electric and fuel cell-powered vehicles by 2040.
The timing of this investment may seem strange to industry observers and investors, as many automakers have announced a pullback from their fully electric vehicle plans amid slower-than-expected adoption of electric vehicles.
Honda said the investment was “aimed at future growth in demand for electric vehicles in North America”, with the battery factory capable of producing 36 gigawatt hours, or GWh, per year.
The project is expected to create at least 1,000 new jobs, in addition to the 4,200 employees the company currently has at its two existing manufacturing plants in Ontario.
Canadian Prime Minister Justin Trudeau said in a live news conference on Thursday that Honda’s investment of C$15 billion is the largest ever in the country’s auto industry. The company is expected to receive more than C$2.5 billion 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 factory in Ohio.
“In North America, following the initiative to establish our production capacity for electric vehicle production systems in the United States, we will now begin formal discussions towards the establishment of a complete value chain for electric vehicles here in Canada, with the support of the governments of Canada and Ontario. » Honda CEO Toshihiro Mibe said in a statement. “We will strengthen our electric vehicle supply system and capabilities in preparation for future increases in demand for electric vehicles in North America.”
Honda said it had “begun the process of evaluating the scope of its investment and finalized negotiations with its joint venture partners.” Its partner on the American site is LG Energy Solution.
The company said it expects to finalize the plans over the next six months.
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