Honda will build batteries for electric vehicles in Ontario with financial support from the Canadian and provincial governments under a plan to be announced this week, a source with direct knowledge of the deal told. Under the terms of the agreement with Ottawa and Ontario, Honda will build batteries, process the cathode materials needed for the batteries, and also assemble electric vehicles in Ontario.
The Trudeau government sees the Honda deal as a success story directly related to those agreements. One government official toldthey created an ecosystem around Canada’s EV supply chain which attracted other auto-related manufactures and allowed the government to transition to its own system of tax incentives.
The Honda deal does not include ongoing production subsidies of the type received by Volkswagen and Stellantis, according to people who spoke with. They declined to divulge the total estimated cost of government support.
The planned Canadian battery factory would be Honda’s second in North America. It is already planning to manufacture batteries with LG Energy Solutions in Ohio in a factory that is expected to come online next year. The factory near Jeffersonville, Ohio, will have an annual capacity of 40 GWh. Honda will also convert its existing manufacturing plants in Ohio to produce electric cars based on its e:Architecture platform in 2026., North America accounts for roughly 40% of Honda’s global sales.