Is Honda Canada’s retooling of its Alliston, Ont., manufacturing plant to build a new hybrid crossover really a step forward for electric and zero emission vehicle manufacturing in Canada? It depends on what comes next

Some of Canada’s top politicians were present this week at Honda Canada’s assembly plant in Alliston, Ont., to announce another original equipment manufacturer’s (OEM) new investment in the province’s automaking sector — specifically, $1.38 billion over six years for an assembly line overhaul to begin production of Honda’s new 2023 CR-V Hybrid crossover.

The factory refurbishment will, according to prime minister Justin Trudeau, support “thousands of good jobs” in Ontario. Premier Doug Ford touted the investment as another step down the path towards the province’s electric vehicle-making future.

Echoing Ford’s remarks, Honda Canada president and CEO Jean Marc Leclerc said the retooling “represents an important milestone for Honda as we move forward in our ambitious vision to make battery electric vehicles represent 100 per cent of our North America vehicle sales by 2040.”

But while the announcement is good news for jobs and the economy, one important detail can’t be overlooked — the hybrid electric vehicle (HEV) they’ll be making at Alliston, the Honda CR-V Hybrid, only has one fuel source: gasoline. It won’t have a plug to enable it to draw power from the electrical grid and is not zero emission.

The only way this announcement is truly about EVs, say industry observers, is if the current retooling paves the way for Honda to bring future plug-in hybrid (PHEV) or battery electric vehicle (EV) production to this location.

An EV to follow?

“In my opinion, I would have much rather seen a more full-throated step taken by Honda towards electric vehicles and have the province encourage that, just like they did with Ford [Canada in Oakville],” says consultant James Carter, a former automotive executive and new mobility expert.

“However, this investment is over six years. So, the question does become: Is this for a lifecycle type event of just CR-V only, or [are] perhaps some of these funds allocated actually going towards potentially putting an electric vehicle into Alliston?”

Honda does make a plug-in version of the CR-V, but it is currently only available in China. In terms of its current plans for North America, Honda will begin selling its first battery electric vehicle, the Prologue SUV, in 2024. Its first-year target is to sell 70,000 units. According to its long-term strategy, with the addition of more EVs to its lineup after that, its goal is to sell 500,000 EVs in North America in 2030 and to reach 100 per cent zero emissions sales in 2040.

Earlier this month, Honda also announced a joint venture with Sony to form a new company that will begin manufacturing and selling electric vehicles as early as 2025.

Electric Autonomy asked Honda Canada and industry minister François-Philippe Champagne’s office if this current deal — which received $263.2 million in federal and provincial support — includes any commitments for future PHEV or EV manufacturing.

In a written reply, a Honda Canada spokesperson said: “This investment will transition Honda of Canada Mfg. (HCM) to building future hybrid-electric vehicles and is part of Honda’s overall plan to fully electrify our fleet in North America by 2040.

“In terms of specific and future electric powerplants and models being manufactured at HCM, I can’t speculate on that at this point. We will certainly be sharing more detailed information when it’s available.”

A spokesperson from minister Champagne’s office had no comment on any commitment, other than to note Honda’s 2040 target. She said the government’s support for the current announcement was about “making sure that we are securing good jobs in Alliston. It will be almost 4,000 jobs and also it’s making sure Honda can transition towards cleaner cars.”

HEVs a potential stepping stone

While he’s not in a position to comment on the deal itself, Raed Kadri, the head of the Ontario Vehicle Innovation Network, told Electric Autonomy in an interview that Honda’s announcement is “very positive” because HEVs can become a stepping stone towards electric vehicle manufacturing.

“Winning new vehicle mandates is always a great thing…It’s an extension of the life of a manufacturing facility, and that means after that, different mandates can come and those mandates will likely go into the electric vehicle space. So this is a step in the extremely right direction,” says Kadri.

Ontario is also home to a skilled workforce, innovators, entrepreneurs, manufacturing facilities and suppliers, adds Kadri, which would make it an ideal place to “build the future vehicles.”

Ontario, of course, is no stranger to recent OEMs commitments to electric vehicle manufacturing. Ford, Stellantis and General Motors each have plans to begin production of electric cars and commercial vans between 2022 and 2025 at their Oakville, Windsor and Ingersoll facilities.

Given government support for those new facilities — and the higher carbon emissions reductions afforded by full EVs versus HEVs (Honda says the CR-V will generate 30 per cent fewer emissions than traditional gas-powered cars) — Carter says he hopes there’s more to come from Honda in Alliston.

“If it’s just a hybrid vehicle, that technology is pretty much already there, hybrids have been around for 25 years and it’s not exactly new. So there isn’t really much in the way of funding [needed] apart from plug-in hybrid, but there’s not necessarily that much in the way of funding related to drawing hybrids,” says Carter.

Plant transition possible

The prospect of transitioning the new plant to make PHEVs or EVs isn’t far-fetched, he adds, though the size of the task would depend on how flexible Honda’s manufacturing lines are and their ability to integrate EVs.

One option, he says, is to use existing platforms and designs with an EV variant based on very similar gasoline and hybrid vehicles already available— something Volvo has done with the XC40 and BMW with the i4.

The other option means “adopting a completely new platform. Now that can be a little tricky to integrate but we’ve seen GM do that, so possibly that could be an option for them as well. But I would hope that, at the least, the Alliston plant has that in their mind to introduce an electric vehicle in that [six-year] timeframe.”