Japanese automaker Honda has been, shall we say, laying very low when it comes to developing a decent electric vehicle, although we can expect its second EV attempt in the US, the Prologue, soon. After calling off beats with GM to “beat out Tesla” with a cheap SUV, it has now emerged with news that it is mulling over a $14 billion EV and battery plant in Canada.
According to Japan’s Nikkei, the Japanese automaker is looking at several sites in Canada, including one near its auto factory in Alliston, Ontario. The company is expected to decide sometime this year, with production beginning in 2028. Continue reading to know more.
Will Honda Really Open the Next Factory in Canada?
If all goes according to plan, Honda will produce in-house batteries at the plant, which would be the company’s second EV plant in North America.
For its part, Canada has done a good job of attracting new investment from the EV industry. Reports say that Canadian industry minister Francois-Philippe Champagne has spent most of last year building up EV investments to solidify the country’s clean-tech future by offering tax breaks and the promise of overflowing renewable energy sources and rare minerals used in EVs.
So far, Volkswagen and its battery company PowerCo are building a gigafactory for cell manufacturing in St. Thomas, Ontario, with production starting in 2027.
Swedish EV battery maker Northvolt is also building a zero-emissions battery factory in Quebec, a province with access to hydroelectric power and a lithium mine near La Corne.
Of course, batteries coming from Canada with materials found in Canada will also help vehicles qualify for the US’s federal EV tax incentives.
As for Honda, it has already said that it will manufacture batteries with LG Energy Solution in Ohio starting in 2025. It also plans to convert its Honda plants in Ohio with the goal of building EVs based on the company’s new Honda e:Architecture in 2026, Automotive News writes.
Honda Motor Co is considering building an electric vehicle plant in Canada in a near 2.0 trillion yen ($13.83 billion) project that could possibly include in-house production of batteries.
The project could be one of Honda’s largest investments, according to a recent report.
The Japanese automaker is looking at multiple potential sites for the plant, including next to an existing automobile factory in Ontario, Nikkei said, adding that Honda expects to come to a decision by the end of the year and the new plant to start as soon as 2028.
Honda already has plans to begin production and sales of EVs in North America in 2026, based on its new Honda e:Architecture. The automaker, with partner LG Energy Solution had in 2022 announced Ohio as the site of their planned $4.4 billion joint-venture battery plant.
Is It Still In Consideration Phase?
Honda might build an electric vehicle (EV) manufacturing plant in Canada, Japanese financial publication Nikkei reports.
The company is reportedly looking at several locations for the project, including one in Ontario next to an existing automobile factory. Nikkei notes Honda will decide by the end of the year and the plant could start running as early as 2028. The project has an estimated $18.5 billion in spending and could feature in-house battery production.
In a statement to The Globe and Mail, François-Philippe Champagne, the Minister of Innovation, Science and Industry, called Honda’s consideration a “testament” to the country’s reputation as an EV leader.
“Reports about Honda looking to make a significant investment in Canada speaks to the quality of workforce and the strength of our industry,” he said. “We will continue to work tirelessly to position Canada’s auto sector for the 21st-century economy.”
The federal government and the Province of Ontario have previously invested in EV manufacturing plants. This includes the Volkswagen plant in St. Thomas and a plant in Windsor with LG Energy Solution and Stellantis N.V.
The two governments also invested in Honda’s manufacturing facility in Alliston, Ont. in 2022.
As Nikkei points out, if the company does establish an EV plant in Ontario, it will be the second of its kind in North America. Honda is also creating an EV production hub in Ohio, which will go into effect in early 2026.
Honda’s Current Plans
The Japanese automaker has existing plans to initiate EV production and sales in North America by 2026, based on its new e-architecture. Collaborating with LG Energy Solution,
Honda had previously chosen Ohio as the site for a planned $4.4 billion joint-venture battery plant in 2022.
Later in 2023, Honda and General Motors scrapped their joint plan to develop affordable EVs, a year after their $5 billion collaboration.
While EV sales have slowly gone down in the United States amid rising interest rates, Honda seemingly looks forward to changing that trend. US President Joe Biden’s administration has also set a goal of having about 50 per cent of EV vehicles in all its new vehicle sales by 2020.
On the other hand, while Honda reportedly eyes a new EV factory in Canada, PM Justin Trudeau has recently also proposed a target of making at least 60 per cent of the new vehicles sold in the country zero-emission by the same year.
As per the latest reports, the Japanese automaker is considering building its next EV factory in Canada as a part of its multi-billion-dollar project, which might also include producing its batteries by 2028.
According to Japan’s Nikkei newsgroup, the substantial project could represent Honda’s most significant investment. However, the company is yet to make an official comment on the same, citing its inability to disclose any information at the moment.
Notably, this comes at a time when Honda, Japan’s second-largest automaker, has been looking forward to ramping up the sale of its electric vehicles. Earlier in 2021, Honda had set an ambitious target for its auto sector of 100 per cent EV production by 2040, as reported by HT.
The report further suggests that the company is exploring various locations for the plant, specifically considering its proximity to an existing factory in Ontario. A final decision on the matter is expected by the year’s end, while the new plant is likely to commence as early as 2028.
Reacting to the news, Canadian industry minister Francois-Philippe Champagne said that it reflects the country’s growing reputation as a leader in attracting green investment in the auto industry.
Budget
In October 2023, Honda and General Motors said they were scrapping a plan to jointly develop affordable electric vehicles (EVs), a year after they agreed to work together in a $5 billion effort to try to beat Tesla in sales. ($1 = 144.6500 yen) (Source: Juby Babu in Bengaluru Editing by Tomasz Janowski and Susan Fenton).
Although Honda had initially agreed with General Motors (GM) to jointly develop and sell mass-market EVs, even planning to launch them by 2027, the project was terminated by Honda in 2023. However, Honda will still sell EVs produced in GM’s factories in 2024. In the long term, Honda has decided to increase its in-house production of electric vehicles.
The Japanese automaker is looking at multiple potential sites for the plant, including next to an existing automobile factory in Ontario, Nikkei said, adding that Honda expects to come to a decision by the end of the year and the new plant to start as soon as 2028.
Honda did not immediately respond to a Reuters request for comment on the report. Honda already has plans to begin production and sales of EVs in North America in 2026, based on its new Honda e:Architecture.
The automaker, with partner LG Energy Solution had in 2022 announced Ohio as the site of their planned $4.4 billion joint-venture battery plant. It could be one of Honda’s largest investments, the report said.
Overview
Honda Motor Co is considering building an electric vehicle plant in Canada in a near 2 trillion yen ($13.83 billion) project that could possibly include in-house production of batteries, Japan’s Nikkei news group reported on Sunday.
The company aims to transition 100% of its new vehicle sales to pure electric vehicles and hydrogen fuel cell vehicles (FCVs) by 2040. By 2030, the goal is to achieve a 40% proportion in the North American market.
Honda is also attempting to produce EV batteries in-house, and the plan involves collaborating with South Korean company LG Energy Solution (LGES) to co-produce EV batteries in the United States.
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