Honda Creating a Comprehensive Electric Vehicle Value Chain

Honda is driving towards a comprehensive electric vehicle (EV) value chain with plans to invest heavily in EV supply system and capability

Honda is driving towards a comprehensive electric vehicle (EV) value chain with plans to invest heavily in EV supply system and capability

Honda is investing to build a comprehensive EV value chain in Canada with an investment of US$11bn, including investment by joint venture partners, to strengthen its EV supply system and capability to prepare for a future increase in EV demand in North America.

Honda has begun evaluating the requirements to build an innovative and environmentally responsible EV plant, and a stand-alone Honda EV battery plant in Alliston, Ontario.

The proposed Honda EV value chain will also include a cathode active material and precursor processing plant through a joint venture partnership with POSCO Future M, as well as a separator plant through a joint venture partnership with Asahi Kasei Corporation, with announcements to follow in their respective Ontario communities.

What lies on the road ahead?

Honda believes that EV production will begin in 2028, and once up and running, the EV plant will have a production capacity of 240,000 EVs per year. The EV battery plant will have an annual capacity of 36GWh.

Not only will this secure the employment of the 4,200 associates at its two existing manufacturing facilities in Ontario, Honda believes it will add a minimum of 1,000 new associates for the EV and EV battery manufacturing facilities.

The new facilities will also create significant spinoff jobs across all sites, including in the construction sector.

Toshihiro Mibe, Global CEO of Honda, says: "Honda is making progress in our global initiatives toward the realisation of our 2050 carbon neutrality goal.

Toshihiro Mibe, Global CEO of Honda (Credit: Honda)

“In North America, following the initiative to establish our EV production system capability in the US, we will now begin formal discussions toward the establishment of a comprehensive EV value chain here in Canada, with the support of the governments of Canada and Ontario. We will strengthen our EV supply system and capability with an eye toward a future increase in EV demand in North America."

Plans for the journey ahead

Honda is now starting the process of assessing the scope of its investment and completing negotiations with its joint venture partners. This is expected to be finalised during the next six months, with more details shared closer to the time.

To support this project, Honda is working along with the governments of Canada and Ontario to drive innovation in low-emissions manufacturing through accessing performance-based initiatives, available through federal government investment tax credits and provincial direct and indirect incentives.

Jean Marc Leclerc, President and CEO of Honda Canada, adds: "Honda of Canada Manufacturing is one of the premier automotive manufacturing facilities in the world and for nearly forty years, our work has been guided by determination, innovation, and a relentless drive to evolve.

Jean Marc Leclerc, President and CEO of Honda Canada (Credit: LinkedIn)

“Today's announcement is a historic investment by a manufacturer in the Canadian auto industry. It proudly honours the highly skilled associates who have earned a global reputation for manufacturing excellence and represents Honda's recognition of the long-term attractiveness of the Canadian electric vehicle manufacturing ecosystem."

Speeding towards carbon neutrality

As Honda looks to realise carbon neutrality for all its products and corporate activities by 2050, it has set a goal to make BEVs and FCEVs represent 100% of vehicle sales by 2040. To turn this into a reality, Honda will carry on offering products in the electrified era globally, including its largest market of North America.

As it aims to reach an electrification future in North America, Honda has positioned its existing auto production plants in Ohio, US, as its EV hub for production. As well as retooling existing plants, and an investment of US$700m. Honda will also construct an EV battery plant with LG Energy Solution, with an expected investment of US$4.4bn.

The Ohio EV hub will act as the foundation for future EV and EV battery production, sharing its knowledge and expertise with other North American Honda plants - including the new assembly and battery plants in Ontario, Canada. Honda expects EV production to begin at the Marysville Auto Plant in late 2025.

As a second step in this initiative, Honda will strive to establish a comprehensive EV value chain that includes all aspects of EV production in Canada.

From the procurement of raw materials mainly for batteries, to the production of finished EVs. Honda will leverage EV production knowledge learned at the Ohio EV Hub, combined with the abundant resources and clean energy available in Canada, to establish a stable supply system for batteries, the key component of EVs, and increase cost competitiveness of its EVs as a whole.

Furthermore, with an eye toward secondary use and the recycling of batteries, Honda will realise low-carbon value creation throughout the entire battery life cycle, through which Honda will establish a highly profitable business foundation and contribute to the realisation of a carbon-neutral society.

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