Honda is considering the establishment of a $14 billion electric vehicle (EV) and battery facility in Canada.
Japanese automaker Honda is considering a substantial investment in the electric vehicle (EV) sector, with plans for a $14 billion EV and battery plant in Canada. The company, known for its iconic Civic model, has been relatively reserved in the EV market but is gearing up for its second attempt with the Prologue in the U.S.
The potential Canadian plant, under scrutiny for locations including Alliston, Ontario, would mark Honda’s second EV facility in North America. A decision is expected this year, with production targeted to commence in 2028. This move aligns with a broader trend of automakers investing in Canada’s EV industry, encouraged by incentives and the nation’s commitment to renewable energy sources.
Canada has witnessed significant developments, with Volkswagen and PowerCo establishing a gigafactory in St. Thomas, Ontario, and Northvolt building a zero-emissions battery factory in Quebec. Utilizing locally sourced materials could also make vehicles eligible for U.S. federal EV tax incentives.
Honda’s commitment to EVs is evident through its collaboration with LG Energy Solution in Ohio for battery production starting in 2025. The company also plans to repurpose Ohio plants to manufacture EVs based on the new Honda e:Architecture by 2026.
Despite past challenges in the EV market, including discontinuations of models like the Honda e and Clarity, the upcoming Prologue SUV, set to release early this year, holds promise. Priced in the upper $40,000s, this SUV aims to position Honda competitively in the EV landscape.
In a strategic move to compete with Tesla, Honda previously entered into a $5 billion deal with General Motors to produce a sub-$30,000 electric SUV. However, this plan was put on hold in October, citing economic uncertainties. Nevertheless, there is optimism that Honda will contribute to the growing wave of affordable EVs manufactured and sourced in North America.
As the automotive industry undergoes a transformative shift towards electrification, Honda’s potential investment in Canada signals a significant step forward in its commitment to sustainable and innovative mobility solutions.