Honda Motor announced on Thursday its plans to invest C$15 billion ($11 billion) in new electric vehicle (EV) and battery production plants alongside its existing facilities in Ontario, marking the Japanese automaker’s largest-ever investment in Canada. The investment, unveiled by company executives and Canadian Prime Minister Justin Trudeau, reflects Honda’s anticipation of increased North American demand for EVs.
Honda, like other Japanese car companies, has been a late entrant into the EV market but is now striving to compete more effectively with agile Chinese rivals. In Canada, the company intends to produce crucial EV components through joint ventures with firms such as Asahi Kasei, establishing a comprehensive production system from materials to finished vehicles.
The operations are set to commence by 2028, with an annual production capacity estimated at a maximum of 240,000 EVs and 36 gigawatt-hours for batteries. Despite a recent slowdown in global EV demand, Honda executive Shinji Aoyama expressed confidence that the supply network would help Honda achieve its goal for all North American sales to be either EVs or fuel cell vehicles by 2040.
Honda anticipates contributing 60%-70% of the total investment, with the remainder coming from joint venture partners and Ontario government subsidies. Support from the federal Canadian government and Ontario could reach around C$5 billion, according to Trudeau’s office, with final investment details expected later this year.
The new EV and battery plants will be constructed adjacent to existing four-wheeled vehicle and engine plants, with the total workforce expected to increase by approximately 1,000 people from the current 4,200. Honda also revealed plans to collaborate with South Korean steel giant POSCO for battery cathode material production and with Asahi Kasei for separators.
By streamlining operations from material development to vehicle assembly in Ontario, including bringing battery production in-house and sourcing locally, Honda aims to reduce costs by more than 20% compared to current methods. Canada has been actively attracting companies involved in all aspects of the EV supply chain to strengthen its manufacturing hub in Ontario as part of global efforts to reduce carbon emissions.
Trudeau praised Honda’s investment as “a vote of confidence in Canada, in Canadian auto workers, and in our manufacturing sector,” highlighting the creation of high-paying jobs, economic growth, and environmental benefits. North America currently accounts for approximately 30% of Honda’s global four-wheeled vehicle sales. Apart from its Canadian plans, Honda is also upgrading facilities at its U.S. plant in Ohio with a $700 million investment and constructing a battery plant in a joint venture with LG Energy Solution for $4.4 billion.
