Source: AFP
Japanese auto giant Honda will open an electric vehicle factory in eastern Canada, a Canadian government source familiar with the multibillion-dollar project told AFP on Monday.
The federal government as well as the province of Ontario, where the plant will be built, will provide some financial incentives for the deal, according to the source, who spoke on condition of anonymity.
A formal announcement is expected Thursday, although Ontario Premier Doug Ford hinted at the deal Monday.
“This week, we reached a new deal. It will be the biggest deal in Canadian history. It will be twice the size of Volkswagen,” he said, referring to a battery plant announced last year that the German automaker has pledged to invest in $7 billion (US$5 billion).
Canada in recent years has positioned itself as an attractive destination for investment in electric vehicles, touting tax incentives, access to renewable energy and rare mineral deposits.
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The Honda plant, to be built an hour outside of Toronto in Alliston, will also produce electric vehicle batteries, joining the existing Volkswagen and Stellantis battery plants.
In January, when news of the deal first broke in the Japanese press, the Nikkei newspaper estimated it would be worth $14 billion — figures recently backed up by Canadian officials.
In the federal budget announced last week, Prime Minister Justin Trudeau’s government introduced a new business tax credit, granting companies a 10 percent rebate on the cost of constructing new buildings used in key parts of the electric vehicle supply chain.
Canada’s strategy follows that of the neighboring United States, whose deflationary law has provided a number of incentives for green industry.
Honda hopes to sell only zero-emission vehicles by 2040, aiming to be carbon neutral in its own operations by 2050.
Source: AFP