Honda Establishes Major Electric Vehicle Supply Chain in Ontario

In a landmark move to accelerate its electric vehicle ambitions, Honda Motor Co. has unveiled plans to invest approximately $15 billion in establishing a comprehensive EV manufacturing ecosystem in Ontario, Canada.

The Japanese automaker aims to construct an all-new electric vehicle assembly plant and a dedicated EV battery plant in Alliston, Ontario by 2028. Once fully operational, the facilities will boast an annual production capacity of 240,000 EVs and 36 gigawatt-hours of batteries.

But Honda's investment goes far beyond vehicle and battery manufacturing. The company is forming joint ventures with POSCO Future M Co. and Asahi Kasei Corporation to build plants for producing cathode active materials/precursors and separators - critical components for EV batteries.

"Honda is making progress in our global initiatives toward the realization of our 2050 carbon neutrality goal," said Toshihiro Mibe, Global CEO of Honda. "In North America, following the initiative to establish our EV production system capability in the U.S., we will now begin formal discussions toward the establishment of a comprehensive EV value chain here in Canada, with the support of the governments of Canada and Ontario."

The $15 billion investment, including contributions from Honda's partners, aims to bolster the company's EV supply chain and production capabilities as it braces for surging North American demand for electric cars in the coming decades. Honda has targeted making battery electric and fuel cell electric vehicles account for 100% of its global sales by 2040.

"We will strengthen our EV supply system and capability with an eye toward a future increase in EV demand in North America," Mibe stated.

In addition to the over 4,200 associates currently employed at Honda's two manufacturing plants in Ontario, the automaker estimates the new EV investments will create at least 1,000 new direct jobs. The project will also generate substantial spin-off employment opportunities in construction and supplier networks.

"Honda of Canada Manufacturing is one of the premier automotive manufacturing facilities in the world and for nearly forty years, our work has been guided by determination, innovation, and a relentless drive to evolve," said Jean Marc Leclerc, President and CEO of Honda Canada Inc. "Today's announcement is a historic investment by a manufacturer in the Canadian auto industry. It proudly honors the highly skilled associates who have earned a global reputation for manufacturing excellence."

The scope of Honda's EV investment underscores the company's recognition of Canada's attractiveness as an EV manufacturing hub, with abundant natural resources, clean energy sources and federal/provincial incentives supportive of sustainable automotive production.

Honda said its next steps include finalizing negotiations with partners over the next six months and collaborating with Canadian authorities to access tax credits and grants promoting green manufacturing initiatives.

The blockbuster announcement solidifies Honda's electrification push, building on the company's plans for an $4.4 billion joint venture with LG Energy Solution to produce EV batteries in Ohio from 2025. As legacy automakers race to localize EV supply chains, Ontario emerges as a new battleground fueled by powerful government incentives.