Honda to invest $11 billion in building EV value chain in Canada

Honda Motor Co plans to build a comprehensive EV value chain in Canada with an approximate investment of CAD$15 billion / US $11 billion (Rs 91,275 crore), including investment by joint venture partners, to strengthen its EV supply system and capability to prepare for a future increase in EV demand in North America. 

The Japanese automaker has begun evaluating the requirements to build an innovative and environmentally responsible Honda EV plant and a stand-alone Honda EV battery plant in Alliston, Ontario. 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 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 EV 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’s North American EV strategy
Honda has set a goal to make BEVs and FCEVs represent 100% of vehicle sales by 2040. To achieve this goal, it plans to continue offering electrified products globally, including its largest market of North America.

As the first step in achieving this electrification goal in North America, 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 US$4.4 billion.

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 will establish a comprehensive EV value chain that includes all aspects of EV production in Canada, from the procurement of raw materials mainly for batteries, to the production of finished EVs. Honda 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.

Furthermore, with an eye toward secondary use and the recycling of batteries, Honda aims to realise low-carbon value creation throughout the entire battery lifecycle, through which Honda will establish a highly profitable business foundation and contribute to the realization of a carbon-neutral society.

Main image: Honda Motor Co