In a significant development for Canada’s automotive industry, Honda, the renowned Japanese automaker, is set to spearhead the creation of the nation’s inaugural complete electric vehicle (EV) supply chain. The announcement was made on Thursday, April 25, by the Prime Minister of Canada.
According to the Office of the Prime Minister of Canada, Honda is poised to make a groundbreaking investment of approximately C$15 billion (US$11 billion) to establish an electric vehicle assembly plant, along with a standalone battery production facility, in Alliston, Ontario.
In a bid to foster a comprehensive supply chain ecosystem, Honda intends to construct a cathode and precursor materials processing plant (CAM/pCAM) in collaboration with POSCO Future M Co., Ltd., and establish a battery cell production facility through a joint venture with Asahi Kasei Corporation.
The new electric car assembly plant is scheduled to commence operations in 2028, with a projected annual production capacity of up to 240,000 vehicles.
This initiative by Honda aligns with a broader trend in Canada’s automotive sector, with several other car and battery manufacturers announcing investments exceeding C$31 billion (US$23 billion) in electric vehicle production since 2020.
To incentivize further investment in the EV supply chain, the Government of Canada has introduced a 10% EV supply chain investment tax credit for fiscal year 2024. This credit aims to attract investment across three key segments: EV assembly, electric vehicle battery production, and the production of materials essential for cathodes.
Canada has set ambitious targets for environmental sustainability, aiming for all new vehicles in the country to be net zero emissions by 2035. With global electric vehicle sales forecasted to triple by 2030 compared to 2023, Canada is poised to emerge as a pivotal player in the burgeoning electric car production landscape.