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Major car manufacturer's multibillion-dollar investment marks crucial step toward next-gen affordable EVs: 'This is a very big day'

The company is aiming to begin operations in 2028.

The company is aiming to begin operations in 2028.

Photo Credit: iStock

Japanese automaker Honda has announced that it will invest $11 billion in new electric vehicle and battery production plants in the Canadian province of Ontario, Reuters reported. The new plants will be added alongside the company's existing factories in Canada's most populous province.

"This is a very big day for the region, for the province, and for the country," Canadian Prime Minister Justin Trudeau said at an announcement event, according to the New York Times. At the same event, the PM said that Canada's target is for "100 percent of all light-duty cars and passenger truck sales be zero emission by 2035."

To meet that ambitious goal, Canada is willing to shell out a lot of money in subsidies. Between 60% to 70% of that $11 billion will come from Honda itself, with the rest coming from partners and from Canadian government subsidies. Trudeau said that around $3.6 billion could come from the Canadian federal government and local Ontario government. 

Honda said that it expects to add around 1,000 jobs to its Ontario workforce, bringing the total to around 5,200.

While electric vehicle sales have slowed somewhat in 2024, causing consternation for many in the industry, Honda's huge investment signals that the legacy automaker remains committed to its stated goal of making all North American sales battery-electric or fuel cell-electric vehicles by 2040. Fuel cell-electric vehicles, which are powered by hydrogen fuel that is made using lots of methane, are somewhat more controversial than battery-electric vehicles and have yet to catch on in any meaningful way — but they remain a big part of Honda's future plans.

The company is aiming to begin operations in 2028, manufacturing 240,000 EVs per year at the Ontario plant.

One aspect of the electric vehicle industry that likely needs to improve to speed up adoption worldwide is affordability — new EVs remain out of reach for many consumers, although the Inflation Reduction Act is offering discounts and tax incentives to United States residents for EV purchases. 

To that end, Honda is looking to use its new manufacturing capacity to make cheaper and lighter next-gen batteries. "We need more affordable EVs," Honda CEO Toshihiro Mibe told Autocar in February.

Electric vehicles, unlike traditional gas-powered cars, produce no direct planet-overheating pollution. Although they do have some environmental drawbacks associated with their batteries, those are far less than the environmental harm caused by traditional cars. So, the more EVs that can replace gas-powered cars, the better for our planet.

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