Sources familiar with the project say the deal with Honda includes a standalone battery manufacturing plant, a retooled car assembly plant, and facilities for both cathode materials and separator components. The battery and assembly plants will be in Alliston, Ont., where the company already manufactures vehicles. The other two will be at another location in Ontario, the sources said.
Ontario Premier Doug Ford said the size of the investment will surpass other electric-vehicle deals in the province. “This week, we’ve landed a new deal. It’ll be the largest deal in Canadian history. It’ll be double the size of Volkswagen. So stay tuned, we’ll be announcing it this week,” he said.
Ontario’s involvement in the project extends back years. In March 2022, Honda announced the retooling of its Alliston plant to manufacture the company’s next-generation models, including hybrids. That summer, Ontario officials met with Honda to discuss a potential investment in battery electric vehicle production.
Since 2022, Ontario’s Minister of Economic Development, Job Creation and Trade, Vic Fedeli, and his team have traveled to Japan three times, and Japanese Honda executives have traveled to Toronto three times. The province also sent two formal letters to Honda Canada to signal Ontario’s support for an investment in battery electric vehicle production in Alliston, as well as the province’s willingness to consider an incentive package for Honda’s EV and EV battery investment.
The deal was solidified at a Dec. 15, 2023, meeting with Mr. Ford and his team. Mr. Fedeli traveled to Tokyo as recently as April 4.
Last week’s federal budget included a new tax credit that would provide companies with a 10-per-cent rebate on the costs of constructing new buildings to be used in the electric-vehicle supply chain. It would be atop other such incentives to which Ottawa has previously committed, including a 30-per-cent manufacturing investment tax credit, as well as provincial supports.
But unlike those other credits, this one would only be available to companies making across-the-board investments in battery-making, the manufacturing of battery components known as cathode active materials, and vehicle assembly.
Honda is the only automaker known to be in advanced talks with the federal and provincial governments for a Canadian EV-sector commitment of that breadth. Earlier this year, the Japanese news group Nikkei reported that the company is considering an investment here of up to $18.5-billion—pointing toward more comprehensive Canadian supply chain plans than those of competitors such as Volkswagen Group and Stellantis NV, whose high-profile investments squarely in battery manufacturing would not qualify.
