Honda Motor Co Ltd (NYSE:HMC) will reportedly invest CA$15 billion ($11 billion) to establish electric vehicle manufacturing facilities north of Toronto, with substantial financial support from Canadian authorities.
Honda executives, alongside Canadian Prime Minister Justin Trudeau and Ontario PremierDoug Ford, will unveil the investment in Alliston, Ontario.
The decision follows close negotiations between Honda and the Canadian government, according to a report from Bloomberg.
Honda’s move reflects a strategic commitment to meet the growing demand for electric vehicles in North America.
The company, known for its hybrid cars in the U.S., intends to commence production of its inaugural U.S.-manufactured fully electric vehicles in Marysville, Ohio, next year.
For Trudeau and Ford, the investment marks a significant milestone in their efforts to position Canada as a key player in the North American electric vehicle market.
Both leaders have already allocated substantial funds to attract other manufacturers, such as Volkswagen AG (OTC:VWAGY), to establish large-scale EV battery plants in the country.
As per the report, Honda plans to construct a new battery assembly plant in Alliston, augmenting existing facilities for electric vehicle production.
The report further noted that the investments are earmarked for a cathode materials facility and a battery components plant in Ontario, with specifics to be disclosed later.
Federal assistance to Honda includes tax credits for clean manufacturing and electric vehicle production, contingent on Honda’s actual expenditure in Canada. Ontario will subsidize capital costs and potentially fund infrastructure upgrades like roads and sewers.
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Price Action: HMC shares traded lower by 2.38% at $33.59 at last check Thursday.
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