Honda Motor announced on Thursday that it, along with several suppliers, will be investing $11 billion to build batteries and electric cars in Ontario. This significant commitment from the company, which has been slow to embrace electric vehicle technology, marks a shift in direction for Honda and other Japanese carmakers.
The investment will be made adjacent to Honda’s factory in Alliston, Ontario, near Toronto, and is expected to create 1,000 new jobs. Prime Minister Justin Trudeau called it a “very big day for the region, province, and country,” noting that it is the largest investment by an automaker in Canadian history.
Honda’s flagship factory in Marysville, Ohio, will also be retooled to produce electric vehicles in 2025, and the company is partnering with LG Energy Solution to invest $4.4 billion in a new battery factory in Jeffersonville, Ohio.
The move towards electric vehicles comes as Honda aims to produce as many as 240,000 electric vehicles a year in Ontario by 2028. The company plans for all its vehicles to be electric by 2040, a more firm commitment than other Japanese carmakers have made.
In response to Honda’s announcement, Toyota revealed plans to expand a factory in Princeton, Ind., to produce a large electric SUV. The world’s largest automaker will invest $1.4 billion in the Indiana project and create up to 340 new jobs.
Canadian leaders have been offering financial incentives to attract carmakers to the country, with the goal of becoming a major player in the electric vehicle supply chain. Canada’s reserves of lithium and other materials needed for batteries, as well as its clean energy sources, make it an attractive location for carmakers looking to reduce greenhouse gas emissions.
Honda will benefit from up to $1.8 billion in tax credits for its electric vehicle projects, and the company plans to work with partners to convert raw materials into battery components. By controlling the supply chain, Honda hopes to cut costs and make electric vehicles more affordable.
Overall, Honda’s investment in Ontario signals a growing trend towards electric vehicles in the automotive industry, with other carmakers following suit to meet the demand for more sustainable transportation options.
