Honda Motor announced on Thursday its plan to invest USD 11 billion in new electric vehicle (EV) and battery production plants in Ontario, marking the largest-ever investment by the Japanese automaker in Canada. This investment, revealed by company executives alongside Canadian Prime Minister Justin Trudeau, underscores Honda’s anticipation of increased demand for EVs in North America.
Traditionally a latecomer to the EV market, Honda, like other Japanese car manufacturers, is now striving to enhance its competitiveness against rapidly advancing Chinese rivals. In Canada, it aims to establish joint ventures with companies such as Asahi Kasei to manufacture crucial EV components, creating a comprehensive production system from materials to finished vehicles.
Operations are slated to commence by 2028, with an expected annual production capacity of up to 240,000 EVs and 36 gigawatt-hours for batteries. Despite a recent slowdown in global EV demand, Honda’s executive Shinji Aoyama expressed confidence that the established supply network would facilitate the company’s target of transitioning all North American sales to EVs or fuel cell vehicles by 2040.
Honda intends to contribute 60%-70% of the total investment, with additional funding from joint venture partners and subsidies from the Ontario government, expected to reach around C$5 billion, according to Trudeau’s office. The EV and battery plants will be situated adjacent to existing four-wheeled vehicle and engine plants, leading to an expansion of the workforce by approximately 1,000 employees from the current 4,200.
Furthermore, Honda announced plans to collaborate with South Korean steel giant POSCO for battery cathode materials production and with Asahi Kasei for separators. By integrating material development, vehicle assembly, and local sourcing in Ontario, including bringing battery production in-house, Honda anticipates reducing costs by over 20% compared to current methods.
Canda seeks to create ecosystem of EV car manufacturing through bringing businesses related to EV supply chain to Ontario. Moreover, the reduction of CO2 emissions will be positively influenced by this policy. Trudeau proclaimed Honda’s investment to be a vote of confidence in Canada, its automotive workers and the manufacturing base, assuring creation of high employability quality jobs at the same time sustaining economic growth by creating a cleaner and healthier environment.