Honda and the Canadian government are reportedly close to an agreement that will see the Japanese automaker build electric vehicles and components in Ontario. Bloomberg received the information from a reliable source, and the reports of a pending deal have multiplied since then
The deal is expected to be officially announced within a week. According to comments by Ontario Premier Doug Ford and his Minister of Economic Development Vic Fedeli, the project will entail a commitment of some $14-15 billion.
Ford is calling the deal the largest of its kind in Canadian history.
The new facilities will process cathode-active materials, build batteries and assemble vehicles. Southern Ontario will become a hub for Honda's North American electrification plan.
The Canadian government will subsidize part of the investment cost, but details of this participation have not yet been revealed.
In last week's federal budget, the government introduced a new investment tax credit giving companies a 10-percent rebate on the cost of constructing new buildings used in key segments of the electric vehicle supply chain.
Clearly, this played a major role in Honda's decision. According to Automotive News, it was a key negotiating condition for the company.