Honda Bets Billions on Ontario in Electric Vehicle Powerplay

Honda Motor Co. is making a massive $15 billion wager on Ontario to construct a vertically integrated electric vehicle supply chain, aiming to establish the province as a powerhouse for its global EV ambitions.

The Japanese auto giant unveiled plans to build an innovative electric car assembly plant and a dedicated EV battery plant in Alliston, Ontario by 2028. With projected annual capacities of 240,000 EVs and 36 gigawatt-hours of batteries, the multibillion-dollar facilities would turbocharge Honda's ability to meet exploding North American demand for emissions-free vehicles.

But the audacious investment stretches far beyond just vehicle and battery production. Honda is forming joint ventures with POSCO Future M Co. and Asahi Kasei Corporation to locally manufacture cathode active materials/precursors and separators - critical rawingredients and components for EV batteries.

"Honda is making progress in our global initiatives toward the realization of our 2050 carbon neutrality goal," stated 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."

The $15 billion outlay, including investments from partners, aims to fortify Honda's EV supply chain from the ground up as it braces for skyrocketing North American demand. The automaker aspires to have battery EVs and fuel cell EVs comprise 100% of its global sales by 2040.

"We will strengthen our EV supply system and capability with an eye toward a future increase in EV demand in North America," Mibe added.

In addition to sustaining over 4,200 existing manufacturing jobs in Ontario, Honda anticipates creating at least 1,000 new direct positions through the EV investments, with potential for thousands more spinoff roles in construction and supplier companies.

"Today's announcement is a historic investment by a manufacturer in the Canadian auto industry," said Jean Marc Leclerc, President & CEO of Honda Canada Inc. "It proudly honours the highly skilled associates who have earned a global reputation for manufacturing excellence and represents Honda's recognition of the long-term attractiveness of the Canadian electric vehicle manufacturing ecosystem."

The scope of Honda's multi-faceted EV commitment to Ontario underscores its strategic prioritization of localizing supply chains in core markets like North America. In parallel, Honda is pursuing a $4.4 billion joint EV battery venture with LG Energy Solution in Ohio.

Government support and incentives are critical enablers. Honda said it will collaborate closely with Canadian federal and provincial officials to access recently introduced tax credits, grants and programs promoting sustainable automotive manufacturing and innovation.

Finalizing negotiations with partners and investment details is expected within six months. Key targets include securing raw material sourcing, implementing low-carbon manufacturing processes and comprehensive battery recycling capabilities.  

As traditional automakers race towards an electric future, Honda's multibillion-dollar vertically integrated gambit in Ontario elevates the region as a new EV battlefield where automakers vie to localize supply chains, leverage clean energy resources and capitalize on lucrative government incentives.