Honda Motor announced on Thursday a groundbreaking $11 billion investment in building batteries and electric cars in Ontario, marking a significant shift for the company towards embracing electric vehicle technology. This move comes as Honda, along with other Japanese carmakers, has primarily focused on hybrid vehicles rather than fully electric cars.
The investment, which will be made in collaboration with several suppliers, will create 1,000 new jobs and is the largest ever by an automaker in Canadian history. The investment will be made adjacent to Honda’s factory in Alliston, Ontario, near Toronto, where the company currently manufactures the Civic sedan and CR-V S.U.V.
Prime Minister Justin Trudeau hailed the investment as a major milestone for the region, province, and country, emphasizing the potential for Honda and other Japanese carmakers to leverage their manufacturing expertise to drive down the cost of electric vehicles and make them more accessible to a wider audience.
In addition to the investment in Ontario, Honda is also retooling its flagship factory in Ohio to produce electric vehicles by 2025 and is investing in a new battery factory in Ohio in partnership with LG Energy Solution. By 2028, the Ontario factory is expected to produce up to 240,000 electric vehicles annually, with Honda aiming for all its vehicles to be electric by 2040.
The move towards electric vehicles in Canada is part of a larger trend, with other automakers like Volkswagen and Northvolt also investing billions in battery factories in the country. Canadian leaders have been offering financial incentives to attract carmakers, with the goal of establishing the country as a major player in the electric vehicle supply chain.
Honda’s CEO, Toshihiro Mibe, highlighted Canada’s attractiveness as a business destination due to its reserves of lithium and other materials needed for battery production, as well as its clean energy sources. The company plans to work with partners to control the entire supply chain for electric vehicle components, with the aim of reducing costs and making electric vehicles more affordable.
While there are challenges, such as the declining price of lithium and competition from lower-cost operations in other regions, political leaders justify the investment by highlighting the job creation potential at both the Honda plant and its suppliers. Asahi Kasei, a Japanese company, also announced plans to invest in a factory in Ontario to produce components for batteries, with Honda as its main customer.
Overall, Honda’s investment in Ontario signals a significant step towards a more sustainable and electric future for the automotive industry, with Canada poised to play a key role in the transition to electric vehicles.
