Honda’s $15-billion EV manufacturing investment isn’t just a massive story in Canada. What happens here will also be the “benchmark” for Honda’s EV factories around the world

A week after Honda Canada announced its $15-billion investment in four electric vehicle and battery manufacturing plants in Ontario, president and CEO Jean Marc Leclerc took to Electric Autonomy‘s EV & Charging Expo 2024 stage to talk more about what’s in store and what the massive project means for Canada.

Beyond its sheer size, Leclerc stressed that Honda’s plans are significant in that, when complete, they’ll comprise an entire EV supply chain within Canada built from the ground up.

Honda’s decision to choose Canada for this undertaking stems from several pivotal factors unique to the country.

“Canada is strongly positioned to play a leading role in the electrification transition considering the supply chain ecosystem that exists in this country,” said Leclerc.

He underscored Honda’s long history and track record here, coupled with Canada’s abundant natural resources, a strong policy environment that supports clean energy and development of a skilled, diverse workforce, as well a proximity to major global markets.

Honda’s existing Alliston, Ont., campus will be home to a new EV manufacturing plant, with an annual capacity of 240,000 EVs, alongside a new gigafactory capable of producing 36 GWh of batteries each year.

“This is going to be a purpose-built production facility with the latest technology that will allow us to [gain] the efficiencies to reduce the cost of building the EVs and battery,” said Leclerc.

The plant will also be the first to utilize Honda’s “unique battery technology,” said Leclerc. As well it will generate 1,000 new direct employment opportunities and position Canada as the benchmark for Honda EV operations around the world.

“Everything in Canada is from the ground up, all new,” said Leclerc.

“The exciting part for me is how Canada will play a role in transferring that knowledge to other Honda [subsidiaries].”

Plans for upstream suppliers and recycling

Honda’s plans also include building a cathode active material (CAM) and precursor cathode active material (pCAM) factory in a joint venture with Posco Chemicals and a separator factory in a joint venture with Asahi Kasei.

Leclerc revealed more about Honda’s strategy to engage with more partners, including upstream suppliers.

“Canada [has an] abundance of raw materials, so we’re [having] a lot of discussions — nothing that I can share with you today — but, critically, this is a very important component of what we want to bring together,” says Leclerc.

He did state that it would be Honda’s preference to have an ownership stake in at least some of these projects, in order to ensure ensure a stable and reliable feedstock.

But beyond upstream supplier partnerships, Honda is also looking at recycling and establishing a circular supply chain to enhance economic value.

“Our objective is to make sure that everything we do is from a carbon neutrality perspective,” said Leclerc. “Recycling speaks to repurposing the battery for energy storage and the very end of life, we dismantle the batteries [and] we use some of the components into battery manufacturing again.”

Making affordable EVs

All the work towards building a vertically integrated supply chain in close proximity within Canada will help one of the main goals of making batteries and selling EVs: making them more affordable.

“Anything you can do to reduce the yield through manufacturing processes, whether battery manufacturing or vehicle manufacturing, all will play into reducing the cost of making vehicles more affordable to the consumer,” said Leclerc.

“I think everything we’re doing in terms of that vertically integration —
the proximity of the supply chain to the plant — all contribute to [affordability]
as opposed to having these pieces dispersed in different parts of the world.”

Advancements in battery technology will also contribute to lowering prices for consumers. This, Leclerc hopes, will boost EV demand.

“Remember, in 2030, 60 per cent of what we sell will need to be electric. I’m very confident that what we’re doing in Canada will contribute significantly to that objective.”