Honda could build $14 billion EV factory in Canada

Honda is considering an investment of $14 billion to build an electric vehicle (EV) factory in Canada to raise its global production capacity.

Nikkeiasia reports this project could reach around 2 trillion yen ($14 billion). This is the largest overseas investment made by any Japanese automaker.

To build this plant, Honda is considering several sites to find a suitable place including Ontario. By clearing the clouds of doubts, the automaker may public an announcement by the end of 2024. Also, the company aims for this facility to become operational by 2028.

Last year, Honda announced an investment of $700 million to re-tool several of its existing auto and powertrain plants to build a new EV production plant in Ohio for the production of EVs in 2026.

The company will turn its Marysville Auto Plant (MAP), East Liberty Auto Plant (ELP), and Anna Engine Plant (AEP) to ramp up production in North America.

If Honda come up with an announcement of the Canadian plant, it would make its second-largest EV production camp in North America after the U.S.

In December 2023, Canada released a new rule for the automotive industry to launch only zero-emission electric vehicles by 2035. This new rule restricts car makers from adopting a phased production for electric, plug-in, and hydrogen models.

This phased release must account for a percent of the overall car’s production throughout the deadline including 20% in 2026, 60% in 2030, and 100% in 2035.

Meanwhile, North America combines around 40% of the overall Honda vehicle sales. The automaker expects to sell about 1.6 million vehicles in the region until March 31.

However, most of these sales are made up of traditional vehicles and the new plant could play a critical role in increasing EV sales in both U.S. and Canada. The local production will also allow Honda to tap subsidies and government schemes to sell more electric cars.