Published on January 8th, 2024 | by Sounder Rajen

Honda Reportedly Plans To Invest USD14 Billion into EV Production In Canada

So is Honda shifting gears to focus fully on EV production in the West?

Apparently, Honda Motor Co (Honda) is considering building an electric vehicle (EV) production plant in Canada and plans to invest almost USD14 billion (about RM65,086,000,000) into this project that could possibly include in-house production of batteries, Japan’s Nikkei news group reported on Sunday.

This project could be the brand’s largest investments and the brand has declined to comment on the report, saying there was nothing it could disclose at this time. Japan’s second-biggest car maker has been slow to step up sales of EVs. While rival Toyota has been proven right so far to go slow, perhaps Honda knows something we don’t.

Moreover, Canada’s industry minister’s office said in a statement to Reuters that reports about Honda looking to make a significant investment in Canada speaks to the quality of the country’s workforce and the strength of its industry. However, with EV sales declining globally, is this really the best time for a project like this?

Well, the spokesperson in question thinks so as they said,“It is a testament to Canada’s growing reputation as a green supplier of choice and global EV leader.” Battery powered vehicles accounted for less than 0.5 percent of Honda’s worldwide sales of about 2.8 million cars over the first nine months of 2023, according to company data.

The Japanese automaker is also looking at multiple potential sites for the plant, including next to an existing automobile factory in Ontario, Nikkei said, adding that the brand expects to come to a decision by the end of the year and the new plant could start as soon as 2028. Who know, maybe things will turn around by then?

On top of that, Honda already has plans to begin production and sales of EVs in North America in 2026, based on its new Honda e:Architecture. The automaker, with partner LG Energy Solution, in 2022 announced Ohio as the site of a planned USD4.4 billion (roughly RM20,455,600,000) joint-venture battery plant.

In October 2023, Honda and General Motors also said they were scrapping a plan to jointly develop affordable electric vehicles, a year after they agreed to work together in a USD5 billion (around RM23,245,000,000) effort to try to beat Tesla in sales. While it seems unlikely, I believe if anyone can achieve this, it has to be Honda.