Honda expected to announce Ontario EV battery plant, part of a $15B investment

Prime Minister Justin Trudeau, Ontario Premier Doug Ford and Honda executives are expected to announce today that the Japanese automaker is building an electric vehicle battery plant in Alliston, Ont., part of a $15-billion investment.

Senior sources with information on the project have told The Canadian Press that Honda is also retooling its assembly plant in Alliston to produce fully electric vehicles.

The $15-billion project includes the retooled plant, an electric vehicle battery plant in close proximity, as well as two key battery parts facilities located elsewhere in Ontario.

There will likely be some capital investment from at least one level of government, but the sources say the deal does not involve production subsidies, which were used to woo two other automakers to build battery plants in Ontario instead of the United States with its incentives under the Inflation Reduction Act.

Instead, the federal government has proposed in its recent budget a 10 per cent Electric Vehicle Supply Chain investment tax credit, which Honda could claim on top of an existing 30 per cent Clean Technology Manufacturing Investment tax credit.

The Honda facility will be the third electric vehicle battery plant in Ontario, following in the footsteps of Volkswagen in St. Thomas and a Stellantis LG plant in Windsor.

Honda's deal also involves two key parts suppliers for their batteries cathodes and separators with the locations of those facilities set to be announced at a later date.

The deal comes after years of meetings and discussions between Honda executives and the Ontario government that began after the last big government announcement at Honda's Alliston facility.

Trudeau, Ford and Honda executives were on hand in March 2022 when the automaker announced hybrid production at the plant, with $131.6 million in assistance from each of the two levels of government.

That kick-started conversations about a larger potential investment into electric vehicles, and negotiations began that summer, the sources said.