Honda to build $15-billion EV plant in Ontario

After months of rumours, Honda Motor Co. Ltd. on Thursday confirmed it is building an electric-vehicle assembly plant, a battery production plant and a cathode active material plant in Alliston, Ont., for an estimated $15 billion, making it the largest investment yet in the country's EV supply chain.

The EV assembly plant is expected to begin production in 2028 with an annual capacity of 240,000 vehicles, and the battery plant will have an annual capacity of 36 gigawatt hours (GWh) per year. Together, they will add approximately 1,000 workers to Honda's workforce.

“The world is changing rapidly,” Toshihiro Mibe, chief executive of Honda, said during the announcement, alongside Prime Minister Justin Trudeau and Ontario Premier Doug Ford, as well as Deputy Prime Minister Chrystia Freeland, Industry Minister François-Philippe Champagne and Ontario Trade Minister Vic Fedeli. “And we must work towards achieving carbon neutrality.”

He described the Honda plant as “a vertically integrated and comprehensive EV battery chain in Canada.”

Mibe said the company will also build midstream battery facilities in Ontario, including a cathode active material plant through a joint venture with Korea's LG Energy Solution Ltd., and a separator plant with Japan's Asahi Kasei Corp.

Government incentives for Honda's plant are expected to total $5 billion, split evenly between the federal government and the province, according to The Canadian Press, with the federal government expecting to offer 10 per cent tax credits on the cost of constructing buildings, and 30 per cent on the cost of new machinery, while the province will provide direct and indirect support.

“A whole ecosystem will be built with four new plants in Ontario,” said Trudeau, adding that the economic benefits would spread across the country.

Honda's planned plant is one of several planned EV battery plants in the country, and the third in Ontario, each of which is creating thousands of construction jobs in the short term and thousands of permanent jobs once completed and production begins.

Provincial and federal governments have lured automakers to invest here with financial incentives, such as tax credits worth billions of dollars, which compete with incentives the United States is offering through its Inflation Reduction Act.