Honda Explores Multi-Billion Dollar Electric Vehicle Factory Project in Canada

In a strategic move towards embracing the electrified era, Japanese automaker Honda is reportedly contemplating the establishment of its next electric vehicle (EV) factory in Canada. According to a report from Japan’s Nikkei news group on Sunday, the potential multi-billion-dollar project could include in-house production of batteries by 2028, representing one of Honda’s most substantial investments to date, with an estimated cost of 2 trillion yen (nearly US$14 billion).

While Honda responded to an AFP query by acknowledging that it is “considering a number of initiatives as we move into the electrified era,” no further details were provided at this time.

The Nikkei report, although unconfirmed by Honda, aligns with Canada’s growing reputation as a leader in attracting green investments in the auto industry, as noted by Canadian Industry Minister Francois-Philippe Champagne in a statement to Global News.

Honda is reportedly exploring various sites for the potential factory, with a notable consideration being adjacent to one of its existing facilities in Ontario province, according to Nikkei. The Japanese automaker is expected to make a decision later this year, paving the way for production to commence in 2028.

In recent years, Canada has actively pursued manufacturers in the electric vehicle sector, enticing them with tax breaks and emphasizing the country’s abundant renewable energy sources and rare minerals crucial for EV batteries.

This move aligns with a broader trend seen in Canada, mirroring the United States’ commitment to green industries. The Inflation Reduction Act of 2022 in the U.S., for example, aims to provide substantial subsidies for such ventures.

Honda’s potential investment in Canada comes after the company announced plans to establish an EV hub in Ohio, USA, in collaboration with LG Energy Solution of South Korea, with the objective of producing EV batteries by 2026. Honda had set an ambitious goal in 2021 for achieving 100 percent EV production in its auto sector by 2040, requiring significant investment. However, the plans to jointly produce “affordable” electric vehicles with American partner General Motors by 2027 were abandoned in late October.