Honda to get up to $5B in govt help for EV battery, assembly plants
Honda is set to build an electric vehicle battery plant next to its Alliston, Ont., assembly plant, which it is retooling to produce fully electric vehicles, all part of a $15-billion project that is expected to include up to $5 billion in public money.
The two plants are expected to create 1,000 jobs on top of retaining the existing 4,200 jobs at the assembly plant.
- Watch Honda announcement live here
The deal does not involve production subsidies, which were used to woo two other automakers to build battery plants in Ontario instead of the United States with its incentives under the Inflation Reduction Act.
But the federal government is expected to give the Japanese automaker around $2.5 billion through tax credits for clean technology manufacturing and electric vehicle supply chain investments.
Ontario has committed to providing up to $2.5 billion directly – such as for capital costs – and indirectly, such as covering site servicing costs.
The $15-billion project includes the retooled plant, an electric vehicle battery plant nearby, as well as two key battery parts facilities – for cathodes and separators – located elsewhere in Ontario.
The Honda facility will be the third electric vehicle battery plant in Ontario, following in the footsteps of Volkswagen in St. Thomas and a Stellantis LG plant in Windsor.
The deal comes after years of meetings and discussions between Honda executives and the Ontario government, which began after the last big government announcement at Honda's Alliston facility.
Prime Minister Justin Trudeau, Premier Doug Ford and Honda executives were on hand in March 2022 when the Japanese automaker announced hybrid production at the plant, with $131.6 million in assistance from each of the two levels of government.
That kickstarted conversations about a larger potential investment into electric vehicles, and negotiations began that summer.
In the midst of those negotiations, in May of 2023, Stellantis and LG stopped construction on their $5-billion electric vehicle battery facility, as they pressed the federal government to match what the United States would offer under its then-new Inflation Reduction Act.
They ultimately reached a deal with Canada and Ontario that will see the companies receive performance incentives of up to $15 billion over about 10 years.
The offer was also extended to Volkswagen for its electric vehicle battery facility and that deal could see up to $13 billion in incentives.
Deputy Prime Minister Chrystia Freeland has said large production incentives were necessary for both Volkswagen and Stellantis to help establish Canada’s green economy and ensure the companies were not lured away to the United States by the benefits under the IRA.
The federal government later indicated that tap was turned off, and Fedeli said in an interview that it didn't derail the negotiations with Honda.
"Production incentives were meant to match the American production incentives, but it's just far too much to continue with on an ongoing basis," he said.
"I think they were good to get started, but the rest of the industry now is starting to realize, right across North America, that you need to be where you really should be for the talent, clean energy and critical minerals."
The other two battery plants in the works have also started to draw other parts of the supply chain, Fedeli said, which became another part of the pitch for Honda – and perhaps others.
"We wanted EV manufacturers, we wanted a couple of battery manufacturers, and now we're filling in the major supply chain: cathode, anode, separator, electrolyte, copper foil, lithium hydroxide, those six major components," he said.
"We still have some room in our incentive packages for that line of six. After that, the incentive is: we brought you a customer. We brought you a battery maker ... You have to go and do your deal with them. You have enough incentive to come here."
This report by The Canadian Press was first published April 25, 2024.
CTVNews.ca Top Stories
LIVE NOW Canada to launch 'national action plan' to fight auto theft
The federal government is launching what it calls its 'national action plan' to combat auto thefts, which will include stronger penalties for thieves, and increased information sharing between police agencies, government officials and border enforcement.
U.S. Supreme Court rejects appeal from former Guantanamo detainee Omar Khadr
The U.S. Supreme Court on Monday rejected an appeal by a Canadian-born former Guantanamo detainee who was seeking to wipe away his war crimes convictions, including for killing a U.S. soldier in Afghanistan.
Iran's president and foreign minister die in helicopter crash at moment of high tensions in Mideast
Iranian President Ebrahim Raisi and the country's foreign minister were found dead Monday hours after their helicopter crashed in fog, leaving the Islamic Republic without two key leaders as extraordinary tensions grip the wider Middle East.
Jury finds Andrei Donet guilty of second-degree murder in stabbing death of Montreal teen
A jury has found a 21-year-old man guilty of second-degree murder in the stabbing death of Montreal teenager Jannai Dopwell-Bailey outside his school in 2021.
What is BORG drinking, and why is it a dangerous trend? An expert explains
If you've been to a party lately and haven't seen someone drinking a BORG, you're likely not partying with college students.
The world's best airline is paying staff a bonus of 8 months' salary
Singapore Airlines will reward its employees with a bonus worth nearly eight months of salary, a person familiar with the matter told CNN on Friday.
Woman, 35, in critical condition after her truck collided with a Via Rail train near Montreal
A 35-year-old woman is in critical condition after the pick-up truck she was driving was struck by a Via Rail passenger train Monday morning in Quebec's Monteregie region.
Investors watching posts from 'Crytpo King' in the wake of fraud, money laundering charges
Former investors of the self-styled “Crypto King” say they are watching his social media accounts and worried his displays of wealth are signs he’s spending their money, even now, as another large expense tied to Aiden Pleterski has triggered a previously unreported lawsuit.
Britain slammed in inquiry for infecting thousands with tainted blood and covering up the scandal
British authorities and the country's public health service knowingly exposed tens of thousands of patients to deadly infections through contaminated blood and blood products, and hid the truth about the disaster for decades, an inquiry into the U.K.'s infected blood scandal found Monday.