MONTREAL, Canada: Japanese auto giant Honda plans to open an electric vehicle (EV) factory in eastern Canada, a Canadian government official familiar with the multibillion-dollar project said on Monday.
The federal government and the province of Ontario, where the plant is being built, plan to offer financial incentives for the deal, the official said.
An official announcement is expected Thursday, but Ontario premier Doug Ford hinted at a deal Monday.
He stated that the German car manufacturer’s contract with Volkswagen was announced last year, and said this week, the largest contract in the history of Canada has been signed. The country has committed to investing 7 billion Canadian dollars ($5 billion).
Canada has positioned itself as an attractive investment destination for electric vehicles in recent years, backed by tax incentives, access to renewable energy and rare mineral resources.
The Honda plant, to be built in Alliston, an hour outside of Toronto, will join existing Volkswagen and Stellantis battery plants and will also produce batteries for electric vehicles.
In the federal budget released last week, Prime Minister Justin Trudeau’s government introduced a new business tax credit that would give companies 10 percent of the cost of building new buildings used in key parts of the electric vehicle supply chain.
Canada’s strategy follows that of neighbouring United States, whose anti-inflationary laws have created many incentives for green industries.
Honda wants to sell only zero-emission vehicles by 2040, with the goal of achieving carbon neutrality in its operations by 2050.
