With its plans already foreshadowed by supplier announcements such as this, Honda Motor last night finally formally announced it planned to build a battery electric vehicle (BEV) plant in Alliston in Ontario with annual capacity for 240,000 units, along with a battery plant with capacity for 36 GWh per year.

The announcement was made at a press conference in Ontario attended by Honda CEO Toshihiro Mibe, Canadian prime minister Justin Trudeau and Ontario premier Doug Ford, along with other company and government officials.

The investment, totalling C$15bn (US$11bn), was described as the largest automotive investment in Canadian history.

The new factories would be built next to Honda’s existing plant in Alliston, just north of Toronto, which produces Civic and CR-V for North America.

The investment also included a battery cathode materials joint venture with South Korea’s POSCO FUTURE M Company and a battery separator plant with Japan’s Asahi Kasei Corporation. The location of these plants had yet to be decided.

BEV production was scheduled to begin in 2028.

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Honda said it expected the new investment would directly create 1,000 new jobs, in addition to the 2,400 workers currently employed by Honda in Alliston.

The Canadian federal government was understood to have offered Honda tax credits worth C$2.5bn to make the investment, with the Ontario provincial government offering an additional C$2.5bn in incentives.

In the federal budget last week, the government introduced a new business tax credit which provides a 10% rebate on the construction costs of new facilities used in key industry segments such as the EV supply chain.

As a first step in its North American electrification strategy Honda had invested US$700m to retool existing US facilities in Ohio to build BEVs and established a joint venture with South Korea’s LG Energy Solution to build a US$4.4bn EV battery plant also in Ohio.

At the Ontario press conference, Mibe said in a statement: “Honda is making progress in our global initiatives towards the realisation of our 2050 carbon neutrality goal.

“In North America, following the initiative to establish our EV production system capability in the US, 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.”

Trudeau pointed to Canada’s efforts to establish “a whole ecosystem” built around the production of EV batteries which, along with generous tax incentives, availability of renewable energy and abundance of mineral deposits, positioned the country as an attractive investment destination for BEV production.