Honda to build out Canadian EV value chain

BEV doubter kicks into gear with manufacturing investment

Honda to build out Canadian EV value chain
Honda does not expect production to begin at the plant until 2028

Japanese automaker Honda will invest $11bn in a comprehensive EV value chain and manufacturing facility in Canada as the laggard firm looks to finally make headway with EVs in North America.

The company will build an assembly plant as well as battery manufacturing facility in Alliston, Ontario, becoming the latest automaker to invest in Canada's EV technology cluster.

"Honda expects that electric vehicle production will begin in 2028," the firm says. "Once fully operational, the EV plant will have a production capacity of 240,000 EVs per year and the EV battery plant will have a capacity of 36GWh per year."

In the meantime, however, Honda faces a challenge to ramp up its existing manufacturing capacity if it hopes to reach its goals of a 40pc BEV sales share in North America by 2030. Its plans will begin next year with the release of the Prologue SUV, for which Honda will lean on Detroit OEM GM's knowhow by licensing the latter's Ultium EV platform.

Honda has already invested in an EV hub in Ohio, which has included an investment of $700mn for the retooling of existing plants, as well as the construction of a joint venture EV battery plant with South Korean manufacturer LG Energy Solution, with an expected investment of $4.4bn.

"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," the firm says.
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However, the automaker reiterated that FCEVs are still part of its plan for carbon neutrality by 2050, even as sales of its CR-V fuel cell vehicle fails to reach significant numbers. The IEA this week also published a report which found that FCEVs will make up an almost negligible share of the global auto market by the middle of the next decade.

Honda's persistence with FCEVs may be one reason why the OEM is so far behind on BEVs. Only 0.66pc of the cars that the Japanese automaker sold worldwide in 2023 were all-electric.

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