Next plant in Canada’s EV supply chain plant landing in Port Colborne, Ont

14 May 2024
Next plant in Canada’s EV supply chain plant landing in Port Colborne, Ont

The next community set for a massive boost to its local economy as part of Honda Canada’s $15-billion investment to establish a Canadian electric vehicle supply chain will be Port Colborne, Ont.

Company executives are expected to join Prime Minister Justin Trudeau and Ontario Premier Doug Ford, as well as federal Innovation Minister François-Philippe Champagne and Ontario’s economic development minister, Vic Fedeli, and municipal leaders at an official announcement on Tuesday.

On April 25, Honda announced a major expansion of its original Canadian facility in Alliston, Ont., to both manufacture batteries and assemble electric vehicle versions of its top-selling brands. On the same day, Japan’s Asahi Kasei Corporation announced a new partnership with Honda to build Canada’s first-ever lithium ion battery separator plant in Ontario — but the municipality that was the successful bidder for this facility was not revealed.

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iPolitics was the first to report that Honda would announce a facility in Ontario’s Niagara Region. Over the weekend, word spread on social media that Port Colborne was chosen. A senior government source confirmed the location to CBC News on Monday.

Asahi Kasei’s announcement last month said Honda’s partner is investing nearly $1.6 billion in this separator facility.

CBC News has learned Port Colborne, Ont., will be the site of Honda’s next plant in its Canadian electric vehicle supply chain. Deputy Prime Minister Chrystia Freeland says it shows the federal government’s investment tax credits are helping to attract business amid fierce global competition.

The federal and provincial governments each contributed $2.5 billion in tax credits and other government incentives to attract Honda’s business to Ontario amid fierce global competition for new electric vehicle manufacturing investments.

Both levels of government have yet to detail what share of these taxpayer incentives helped secure the Port Colborne plant specifically.

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Finance Minister Chyrstia Freeland visited a child-care facility in St. Thomas, Ont. Monday and did not answer a question from CBC News asking how much the government is contributing for this plant or how many jobs it was counting on in return for that taxpayer contribution. Instead, she talked about how the Volkswagen battery plant now under construction in St. Thomas is transforming that city from a community in decline to one that’s “vigorously growing.”

“You can see it on the street,” the minister said, linking the arrival of these EV battery plants to the overall success of her government’s economic plan.

With interest in electric vehicles seemingly lagging, is Honda’s $15-billion plan to build four electric vehicle plants in Ontario a good investment? CBC’s Erica Johnson asks industry experts David Booth and Daniel Breton to break down the risk versus reward.

Freeland called on all parties to help pass two budget bills that implement the Liberal government’s new suite of investment tax credits, including its new supply chain tax credit specifically designed to encourage vertical investments like Honda’s.

“It’s not some abstract thing,” she said. “Getting these credits passed into law is what we need to make investments like the Honda investment real, to get that money coming into our country and to get the jobs that it brings.”

Winnipeg was in the running to host the separator plant, touting Manitoba’s ability to provide renewable electricity and critical minerals. However, Manitoba’s capital was outbid by southwestern Ontario.

Honda Canada’s original footprint in Allison, Ont., will dramatically expand to include new electric vehicle assembly lines, as well its own battery manufacturing plant. Joint ventures in Port Colborne, Ont., and a second yet-to-be-announced municipality will feed into this supply chain. (Patrick Morrell/CBC)

Quebec also missed out on a Honda manufacturing facility. When the company revealed last month that it would locate all of its new plants in Ontario, the Legault government complained the Japanese carmaker had become too greedy.

The other Ontario municipality that’s in line for a cathode active material and precursor (CAM/pCAM) processing plant, as part of a joint venture with South Korea’s POSCO Future M Co., Ltd., is expected to be announced by Honda in the coming weeks.

Amid rising concerns about the affordability of electric vehicles for consumers, Honda has predicted it will cut its battery-making costs by 20 per cent through the kind of vertically integrated supply chain it’s establishing in Ontario.


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The province is already home to a ready network of automotive parts suppliers and offers a relatively clean electricity grid, as well as convenient highway and bridge access to its valuable American consumer market.

Canada and Japan are both members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a trade deal that allows for reciprocal labour mobility, as well as preferential tariff treatment for automotive parts and vehicles, if its requirements for regional manufacturing are satisfied.

Source: cbc

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