Japanese legacy automaker Honda is getting close to securing a deal with the Canadian government to build electric vehicles and components in Ontario, Bloomberg reports, citing unnamed sources close to the talks.
Honda eyes Ontario for local manufacturing
Honda is reportedly on the verge of closing a deal with Canada officials for its planned local electric vehicle and components manufacturing in the province of Ontario.
The industry expects Honda and the Canadian government to announce the speculated multibillion-dollar investment within a week.
Honda aims to utilize the money to establish new facilities in Ontario to assemble all-electric vehicles, produce batteries, and process key cathode active materials.
This potential investment would advance southern Ontario’s position as a primary hub for Honda’s EV production in North America.
Government support
As per the report, the Canadian government would offer Honda subsidies to support its plans to build new facilities in Ontario. The subsidies will make up for a portion of Honda’s capital costs.
However, Canadian officials have yet to disclose the sum of their planned financial aid for the Japanese legacy automaker.
According to Ontario Premier Doug Ford, the Honda-Canada deal would be the largest in the country’s history. He further noted that its value will be twofold higher than Volkswagen’s planned EV factory in Ontario (C$7 billion).
In 2023, Prime Minister Justin Trudeau said that the country was scouting more “targeted” investments following the government’s move to offer significant subsidies to VW and Stellantis-LGES for their proposed battery plants.
Last week, the Canadian government announced a new investment tax credit under a federal budget. It offers companies a 10% rebate on building construction costs intended to boost the electric vehicle supply chain.
Why Canada?
Canada has a huge mining industry for critical minerals essential for electric vehicle production, including lithium, nickel, and cobalt.
That said, it is unsurprising that the government has offered substantial incentives to establish a profitable and healthy business environment for electric vehicles.
The Canadian government aims to further attract significant investment from major players worldwide to boost its local industry.
