Honda considering $18.4B electric vehicle and battery plant in Canada: media report

A general view of production along the production line is shown during a tour of a Honda manufacturing plant in Alliston, Ont., Wednesday, Apr. 5, 2023. Japanese automaker Honda says it will start producing the Civic Hybrid next year at its plant in Alliston, Ont.THE CANADIAN PRESS/Cole Burston

ALLISTON, Ont. -

Honda Motor Co. Ltd. could invest upwards of $18.4 billion in an electric vehicle plant in Canada, according to a report from a Japanese news outlet.

Nikkei Asia said on Sunday that Honda is considering building both a vehicle and battery plant in the country as part of efforts to catch up in the electric vehicle market.

The report says Honda is looking at several sites, including next to its existing plant in Alliston, Ont., with a potential investment decision expected by the end of the year.

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Honda did not immediately respond to a request for comment.

A spokesperson for Industry Minister Francois-Philippe Champagne did not confirm whether any talks were going on between the company and the government.

The minister said in a statement that the report about Honda's potential investment is a "testament to Canada's growing reputation as a green supplier of choice and global EV leader."

"Reports about Honda looking to make a significant investment in Canada speaks to the quality of workforce and the strength of our industry," Champagne said in the statement.

The Nikkei report says the abundance of renewable energy in the country is part of the reason Honda is considering Canada, while in December the federal government mandated that all passenger vehicle sales would be electric by 2035.

Honda is retooling a production plant in Ohio to produce electric vehicles and has an agreement in place to build an electric vehicle battery plant in the state with LG Energy Solution, but the report says the company might go it alone on the battery plant in Canada.

LG is already in a partnership with automaker Stellantis to build a $5 billion battery plant in Windsor, Ont., one of numerous major EV investments Canada has secured after offering generous subsidies.

Volkswagen is building a battery plant in St. Thomas, Ont., and Northvolt is building one about 30 kilometres east of Montreal, with the three plants expected to cost tens of billions of dollars in subsidies linked largely to production volumes.

Honda announced in 2022 that it was investing $1.38 billion to upgrade its Allison plant in part to prepare it to be the lead plant for its CR-V hybrid crossover vehicle.

The company is only this year launching the sale of its first fully electric vehicle in Canada, the Prologue, with limited quantities expected in the first production year.

This report by The Canadian Press was first published Jan. 7, 2024.