Speculation that Honda could be making an $18.5 billion electric vehicle investment in Canada has intensified following Ottawa's introduction of a new EV tax credit. PHOTO courtesy Honda.
A new tax credit announced in Tuesday’s federal budget is rekindling hopes that Canada may land a massive electric-vehicle investment by Honda, according to the Globe and Mail.
The measure announced in Budget 2024 offers companies a 10% rebate on the costs of constructing new buildings to be used in the electric vehicle supply chain. The measure is in addition to other such incentives Ottawa already provides, including a 30% manufacturing investment tax credit, as well as provincial supports.
Unlike the previously announced credits, however, this one would only be available to companies investing in battery-making in Canada, the manufacturing of battery components known as cathode active materials, and vehicle assembly.
Honda Motor Co. Ltd. is the only automaker known to be in advanced talks with the federal and provincial governments for a Canadian EV-sector commitment of that breadth, the Globe and Mail reports. Earlier this year, the Japanese news group Nikkei reported that the company is considering an investment here of up to $18.5 billion.
There have been several trips to Japan by Canadian officials, most recently a visit this month by Ontario Economic Development Minister Vic Fedeli, the Globe and Mail reports, adding that “the perception among industry insiders is that the new tax credit may be a final component of an incentive package offered by the federal and provincial governments, to get the negotiations over the finish line.”
“There’s a very short list of very big companies who are looking at a very big investment and talking to Canada, Ontario and Quebec, to whom this would apply,” Automotive Parts Manufacturers’ Association president Flavio Volpe told the Globe and Mail, referring to the two provinces vying for major EV commitments. “The translation here is that there are big new EV investments coming.”
