Honda is set to announce a major investment in Ontario for the production of electric vehicles (EVs) and their components, with financial backing from the Canadian and provincial governments, according to a source familiar with the deal.
As part of the agreement, Honda will manufacture batteries, process cathode materials for these batteries, and assemble EVs in Ontario. The details of the government support package have not been disclosed.
The deal, expected to be finalized and announced on Thursday, is valued at billions of dollars, making it one of the largest investments in Canadian history. The agreement underscores Canada’s efforts to attract investments across the EV supply chain to strengthen its manufacturing sector, particularly in Ontario.
Ontario Premier Doug Ford emphasized the significance of the deal, stating that it surpasses the C$7 billion cost of a planned Volkswagen EV plant in the province. The investment from Honda is a testament to Canada’s appeal as a destination for EV manufacturing.
Prime Minister Justin Trudeau previously highlighted the government’s focus on targeted investments, following substantial subsidies provided to companies like Volkswagen and Stellantis-LG Energy Solution for their battery gigafactories. The government recently introduced a new investment tax credit, offering companies a 10% rebate on the construction costs of new buildings used in key segments of the EV supply chain.
The move by Honda aligns with global efforts to reduce carbon emissions and transition to cleaner transportation alternatives. Ontario’s support for this initiative underscores its commitment to sustainable manufacturing practices and economic growth through EV production.
