Honda's $11 Billion North American BEV Capability Boost

Honda continues its nearshoring trading strategy in North America with plans to build automotive battery and battery-electric vehicle production plants in Canada.

It is investing $11 billion into the project to build the facilities at its existing plants at Alliston, ON, in a bid to strengthen its BEV supply system and capabilities to fend off expected increased competition from inexpensive Chinese products.

The proposed Honda BEV supply chain will include a cathode active material and precursor (CAM/pCAM) processing plant through a joint venture partnership with Korean steel giant Posco Future M Co. and a separator plant in partnership with Asahi Kasei Corp.

Honda expects the vehicle production plant to start operations in 2028 and be able to churn out up to 240,000 BEVs annually while the battery plant will have a capacity of 36 GWh per year.  The automaker expects to add 1,000 employees to the existing 4,200 people at its two manufacturing facilities in Ontario. The investment in the new facilities is expected to create significant spinoff jobs across all sites, including in the construction sector.

Toshihiro Mibe, Honda CEO, says: “In North America, following the initiative to establish our EV production system capability in the U.S., 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.”