Honda announces $15B plan to establish Canadian EV supply chain

Key Takeaways:

• Honda has begun evaluating the requirements to build a Honda EV plant and a stand-alone Honda EV battery plant in Alliston, Ont.
• The proposed Honda EV value chain will also include a cathode active material and precursor (CAM/pCAM) processing plant through a joint venture partnership with POSCO Future M Co., Ltd. and a separator plant through a joint venture partnership with Asahi Kasei Corporation.
• Honda has set a goal to make battery electric vehicles and fuel cell electric vehicles represent 100% of vehicle sales by 2040.
• As the first step, Honda has already positioned its existing auto production plants in the state of Ohio in the U.S. as its EV Hub for production. This hub will share its knowledge with the rest of Honda’s North American plants, including future facilities in Ontario.

The Whole Story:

Honda plans to build a comprehensive EV value chain in Canada with an approximate investment of $15 billion.

The sum includes investment by joint venture partners and will be used to strengthen Honda’s EV supply system and capability to prepare for a future increase in EV demand in North America. 

“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. We will strengthen our EV supply system and capability with an eye toward a future increase in EV demand in North America.”

Honda says it has begun evaluating the requirements to build a Honda EV plant and a stand-alone Honda EV battery plant in Alliston, Ont. The proposed Honda EV value chain will also include a cathode active material and precursor (CAM/pCAM) processing plant through a joint venture partnership with POSCO Future M Co., Ltd. and a separator plant through a joint venture partnership with Asahi Kasei Corporation, with announcements to follow in their respective Ontario communities.

Honda expects that electric vehicle production will begin in 2028. Once fully operational, the EV plant will have a production capacity of 240,000 EVs per year and the EV battery plant will have a capacity of 36 GWh per year.

In addition to securing the current employment level of 4,200 associates at its two existing manufacturing facilities in Ontario, Honda estimates it will add a minimum of 1,000 new associates for the EV and EV battery manufacturing facilities. The investment in the new facilities will also create significant spinoff jobs across all sites, including in the construction sector.

Honda says it has begun the process of evaluating the scope of its investment and completing negotiations with its joint venture partners. This work is expected to be finalized during the next six months and more details will be shared at that time.

To support this project, Honda is collaborating with the governments of Canada and Ontario to drive innovation in low-emissions manufacturing by accessing performance-based initiatives available through the federal government’s new Investment Tax Credits and provincial direct and indirect incentives.

North American EV strategy

Striving to realize carbon neutrality for all its products and corporate activities by 2050, Honda has set a goal to make BEVs and FCEVs represent 100% of vehicle sales by 2040.

As the first step, Honda positioned its existing auto production plants in the state of Ohio in the U.S. as its EV Hub for production, including the retooling of existing plants, an investment of USD$700 million, and the construction of a joint venture EV battery plant with LG Energy Solution, with an expected investment of USD$4.4 billion.

According to Honda, the Ohio EV hub will serve as the foundation for future EV and EV battery production, sharing knowledge and expertise with other Honda plants in North America, including the new EV assembly and battery plants in Ontario, Canada. Honda expects EV production to begin at the Marysville Auto Plant in late 2025. 

As a second step in this initiative, Honda plans to establish a comprehensive EV value chain in Canada, from the procurement of raw materials mainly for batteries, to the production of finished EVs.  Honda says it will leverage EV production knowledge learned at the Ohio EV Hub, combined with the abundant resources and clean energy available in Canada, to establish a stable supply system for batteries, the key component of EVs, and increase cost competitiveness of its EVs as a whole.