Honda promised up to $5B in to build new EV battery plant in Alliston

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CaDCR staff writer

Honda will build an electric vehicle battery plant next to its Alliston assembly plant, which it is retooling to produce fully electric vehicles as part of a $15-billion project to create a supply chain in the province for the Japanese automaker.

This large-scale project will see four new manufacturing plants in Ontario. Honda will build an innovative and world-class electric vehicle assembly plant – the first of its kind for Honda Motor Co. Ltd. – as well as a new stand-alone battery manufacturing plant at Honda’s facilities in Alliston, Ontario.

To complete the supply chain, Honda will also build a cathode active material and precursor (CAM/pCAM) processing plant through a joint venture partnership with POSCO Future M Co., Ltd. and a separator plant through a joint venture partnership with Asahi Kasei Corporation. Once fully operational in 2028, the new assembly plant will produce up to 240,000 vehicles per year.

Prime Minister Justin Trudeau said the jobs involved are at the heart of the deal.

“It’s about, yes, creating green products that Canadians can rely on into the future, but it’s primarily about investing in the workers and the communities that they are part of as these plants get built and as they work for generations to come,” he said Thursday at a news conference detailing the project.

The federal government is set to give the Japanese automaker around $2.5 billion through tax credits.

That’s on top of an existing 30 per cent Clean Technology Manufacturing investment tax credit on the cost of investments in new machinery and equipment.

Ontario has committed to providing up to $2.5 billion directly – such as for capital costs – and indirectly, such as covering site servicing costs.

Ontario Premier Doug Ford said Honda’s investment is a generational commitment.

“What price do you put on that? There is no price you can put on that because we’re investing into the people. The money is staying here in Ontario. It’s not going overseas, it’s not going down to the U.S., it’s staying right here in Ontario for decades and generations to come.”

The Honda facility will be the third electric vehicle battery plant in Ontario, following in the footsteps of Volkswagen in St. Thomas and a Stellantis LG plant in Windsor.

The deal comes after years of meetings and discussions between Honda executives and the Ontario government, which began after the last big government announcement at Honda’s Alliston facility.

“Today’s historic $15 billion investment by Honda delivers on our government’s promise to bring back manufacturing as part of our plan to rebuild Ontario’s economy, with thousands of good-paying union jobs and economic benefits for workers and families across the province. From our abundant critical minerals in the Ring of Fire to our highly skilled workforce, Ontario has what it takes to secure the jobs of the future as the world leader in electric vehicle manufacturing, with better jobs and bigger paycheques for our world-class workers.”In the midst of those negotiations, in May of 2023, Stellantis and LG stopped construction on their $5-billion electric vehicle battery facility, as they pressed the federal government to match what the United States would offer under its then-new Inflation Reduction Act.

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