Canada is reportedly nearing a deal with Honda Motor Co. (NYSE:HMC) to manufacture electric vehicles and components in Ontario.
Honda’s agreement involves constructing new facilities in southern Ontario for processing cathode active materials, building batteries, and assembling electric vehicles, with Canadian government subsidies, reported Bloomberg.
The deal underscores Canada’s push to attract investments in the electric vehicle sector amid global shifts towards sustainable transportation.
Honda’s investment signals a significant move in the auto sector, positioning southern Ontario as a pivotal hub for the company’s electric vehicle manufacturing endeavors in North America, the report noted.
The forthcoming announcement, expected within a week, encompasses Honda’s multibillion-dollar commitment to establish facilities for various EV components.
Honda currently operates a manufacturing plant in Alliston, Ontario, where it produces popular models like the CR-V and Civic.
Canada’s negotiations with Honda have revolved around investment tax credits, a mechanism to subsidize capital costs for establishing EV production facilities.
Finance Minister Chrystia Freeland’s recent budget introduced additional tax credits tailored to incentivize electric vehicle manufacturing within Canada, showcasing the government’s commitment to fostering a robust EV ecosystem.
Price Action: HMC shares closed lower by 0.90% at $34.14 on Friday.
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