Honda Announces $15 Billion Investment in Ontario for Electric Vehicle Manufacturing

On April 26, 2024, Prime Minister Justin Trudeau and Ontario Premier Doug Ford announced that Honda Canada is investing approximately $15 billion to create Canada's first comprehensive electric vehicle supply chain in Ontario. This historic investment includes building four new manufacturing plants: an electric vehicle assembly plant, a battery manufacturing plant, a cathode active material and precursor processing plant, and a separator plant.

The new assembly plant, once fully operational by 2028, will produce up to 240,000 electric vehicles per year and create over 1,000 well-paying manufacturing jobs in Ontario. The other plants will help create thousands of additional direct and indirect jobs across the province and Canada. "This investment is a vote of confidence in Canada's highly skilled workers, strong economies, and competitive business environments," said Prime Minister Trudeau, positioning the country as a global leader in electric vehicle manufacturing and battery production.

Why this matters: Honda's $15 billion investment in Ontario marks a significant milestone in Canada's transition towards a greener economy and sustainable transportation. This historic deal not only creates thousands of jobs but also positions Canada as a key player in the global electric vehicle supply chain.

The federal and Ontario governments are supporting the investment with approximately $5 billion in direct and indirect incentives, split evenly between them. Unlike previous deals with Volkswagen and Stellantis, Honda will receive tax credits as long as it builds the plants, regardless of the production levels, which is designed to attract more investment over time.

Honda is working with joint venture partners to cover all aspects of EV manufacturing, including the procurement of raw materials for battery production. This includes a cathode active material and precursor processing plant through a joint venture with Posco Future M Co. and a separator plant through a joint venture with Asahi Kasei.

This investment, Honda's largest ever in Canada, is part of the company's goal to have zero-emission vehicles account for 100% of its sales by 2040. The deal establishes Canada's first comprehensive EV supply chain and is expected to create many construction jobs and opportunities for auto parts suppliers across Ontario and Canada.

"This is the largest auto investment in Canada's history, supported by $2.5 billion in direct and indirect government incentives," said Ontario Premier Doug Ford, dismissing criticism from the federal Conservatives about the use of taxpayer money to support foreign workers as normal for a project of this scale. Honda's $15 billion investment in electric vehicle manufacturing plants marks a pivotal moment for Canada's automotive industry and its transition towards a sustainable future.

Key Takeaways

• Honda to invest $15B to build Canada's first comprehensive EV supply chain in Ontario.
• New plants will produce up to 240,000 EVs/year and create over 1,000 manufacturing jobs.
• Federal and Ontario govts to provide $5B in incentives to attract more EV investment.
• Honda partners with Posco and Asahi Kasei to cover battery material and separator production.
• Investment marks a pivotal moment for Canada's auto industry's transition to sustainability.