Clean Energy Canada | Honda EV investment the culmination of years of government leadership, securing Canada’s place as an EV heavyweight
April 25, 2024

image of red honda logo

OTTAWA — Joanna Kyriazis, director of public policy at Clean Energy Canada, made the following statement in response to Honda’s $15 billion investment into Ontario to build an integrated electric vehicle battery supply chain:

“Today’s announcement from Honda marks what is by far the largest auto sector investment in Canada’s history and is a $15-billion dollar vote of confidence in Canada’s EV industry—and a clear indicator that the future of the global auto market is electric. 

“Honda will bring to Ontario new manufacturing activities and jobs in the three highest value parts of the EV battery supply chain: battery materials production, battery cell manufacturing, and EV assembly. The investment will significantly expand Honda’s presence in Canada, further onshore North America’s EV supply chain, and up Honda’s EV game.  

“Honda’s investment joins an impressive list of EV and battery projects destined for Canada, demonstrating just how much our country stands to gain as the world shifts to a cleaner economy. Between 2020 and 2024, investments in Canada’s EV battery supply chain have grown to a whopping $49 billion, blowing even some of the most optimistic growth projections out of the water. Indeed, Clean Energy Canada previously projected that an EV battery supply chain could create 250,000 direct and indirect jobs across the country by 2030, assuming it landed two gigafactories—Canada is now on track to open four such factories.

“The investment will be supported by both federal and Ontario government contributions of up to $2.5 billion each. The federal portion will be fully covered by various investment tax credits it recently introduced to build Canada’s clean economy and compete for global investments.

“Critically, today’s success reinforces the fact that the enormous opportunity before us will only be fully realized when the federal government and provinces work together.

“EV sales are continuing to smash records both globally and locally, with one in five cars sold globally in 2024 projected to be an electric vehicle. Canada’s auto sector is positioning itself to play a central role in meeting growing demand for these cost-saving, carbon-cutting vehicles. A recent Clean Energy Canada study found that EVs can save drivers tens of thousands of dollars.  

“Canada recently bumped China out of the top spot in BloombergNEF’s Global Lithium-Ion Battery Supply Chain Ranking, an annual assessment that rates 30 countries on their potential to build a secure, reliable, and sustainable lithium-ion battery supply chain. And that was before today’s announcement.

“In other words, Canada is well on its way to reinventing itself as an automotive heavy weight for our changing world.”

RESOURCES

  • Report | Canada’s New Economic Engine
  • Op-ed | Capturing Canada’s Electric Vehicle Opportunity

KEY FACTS

  • Honda’s plans will include: 
  • A new EV assembly plant and a battery cell manufacturing plant at the company’s Alliston campus, where Honda currently builds the CR-V and Civic. The EV assembly plant will build up to 240,000 vehicles per year, and the battery plant will have a manufacturing capacity of up to 36 Gigawatt-hours per year. Production is set to begin in 2028. 

  • Two more factories with yet-to-disclose locations in Ontario:

    • A cathode active material and precursor cathode active material factory in a joint venture with South Korea-based Posco Chemicals.
    • An EV battery component factory in a joint venture with Japan-based Asahi Kasei.

  • Together, these investments will preserve 4,200 existing jobs and create at least 1,000 more.
  • Honda’s battery cell manufacturing plant will be the fourth battery gigafactory Canada has landed in the last two years. The others include a $7 billion Volkswagen plant in St. Thomas, Ontario, a $7 billion Northvolt plant outside of Montreal, and a $5 billion Stellantis-LG Energy plant in Windsor. 
  • Both the federal and Ontario governments will contribute up to $2.5 billion in support of this deal. The federal government’s contribution will be fully supported by the 30% Clean Technology Manufacturing Investment Tax Credit announced in Budget 2023 and the 10% EV Supply Chain Investment Tax Credit used for buildings announced in Budget 2024. This differs from the federal package offered for the other three battery plants deals, which included production tax credits designed to match the U.S. Inflation Reduction Act. 
  • EVs made up 18% of all new cars sold globally in 2023, according to the International Energy Agency’s just-released Global EV Outlook 2024. In Canada, 11.7% of new cars sold were electric last year, up from 8.9% in 2022.