Honda spending $1.3B to upgrade GTA plant building hybrid CR-Vs — will it lead to more driving electric?

Honda spending $1.3B to upgrade GTA plant building hybrid CR-Vs — will it lead to more driving electric?

by Sue Jones
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A division of Honda Canada says it will spend $1.38 billion over six years to upgrade an Ontario manufacturing plant to make electric hybrid vehicles, an investment that includes millions in funding from the federal and provincial governments.

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Prime Minister Justin Trudeau, centre, and Ontario Premier Doug Ford, left, tour an assembly line, before making an announcement at a Honda plant in Alliston, Ont., on March 16. (Chris Young/The Canadian Press)

The prime minister and Ontario’s premier announced millions in funding support for domestic hybrid car production on Tuesday but both leaders dodged questions on the possibility of incentives to help Canadians buy them.

Justin Trudeau and Doug Ford were in Alliston, Ont., on Wednesday to formally announce the $131.6 million each government has committed to spend on upgrades at a Honda manufacturing plant that will eventually build the 2023 CR-V and CR-V Hybrid vehicles.

Both leaders said the plan would help ensure good local auto sector jobs into the future.

“These investments will ensure Honda Canada builds its next-generation models like hybrids right here in Ontario to be sold right across North America,” Ford said.

“This means the cars of the future will be built right here by Ontario workers using Ontario resources.”

Honda said the retooling project would cost $1.4 billion over six years.

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Trudeau said projects like Honda’s will help Canada make a sustainable economic recovery from the COVID-19 pandemic. (Chris Young/The Canadian Press)

Trudeau said projects like Honda’s will help Canada make a sustainable economic recovery from the COVID-19 pandemic.

“That means understanding where the world is going and celebrating the fact that Honda sees that and sees Canada and Canadians as essential partners in moving forward that way,” he said.

Ford has said he wants to ramp up electric and hybrid vehicle manufacturing in Ontario. Last year his government announced a 10-year plan to make more batteries, vehicles and parts in the province, train more autoworkers and eventually mine for minerals in northern Ontario.

No incentives for Ontarians to buy electric: Ford

In 2018, Ford’s government cancelled the electric vehicle rebate program brought in by the Liberals under Kathleen Wynne.

The premier told CBC News last fall that he didn’t want to provide rebates to people buying $100,000 vehicles like Teslas. In November, Ford’s government again said it would not bring back the rebate.

Asked on Wednesday if he would reconsider in light of the announcement, the premier didn’t provide a direct answer. Instead, he suggested his policy move had boosted sales.

“Since we’ve been in office, electric vehicles have tripled in sales, so I guess that was a good decision,” he said, pointing to his government’s plans to support vehicle production in other ways. “We’re putting money back into electric vehicles.”

However, a report from market analytics firm IHS Markit last fall shows electric vehicle sales in Ontario were far behind that of other provinces offering incentives in the third quarter of 2021.

Ford did add that more infrastructure, like charging stations, are being added to the province’s ONroute facilities as the market demand grows.

Opposition parties promise rebate ahead of election

Provincial opposition politicians, gearing up for a June 2 election, pledged on Wednesday to bring back buyer rebates.

The Ontario Liberals promised Wednesday to give families rebates up to $8,000 for buying or leasing a zero emissions vehicle and $1,500 for purchasing charging equipment. The party said an elected Liberal government would make charging stations more widely available in apartment buildings, parking lots, city streets and transit stations through a 30 per cent subsidy for charging infrastructure.

The provincial Greens said they would offer cash incentives up to $10,000 for buyers of electric vehicles, introduce low-cost financing for the cars and promised to expand charging infrastructure.

The party said it was “relieved” to see Ford investing in electric vehicles after past cuts, but leader Mike Schreiner said incentives are needed to help people make the transition.

Other automakers expanding EV offerings in Canada

Honda’s investment isn’t the first in Canada by an automaker trying to expand its EV offering.

General Motors Co. and South Korea’s Posco Chemical recently announced a deal to spend $400 US million to build a plant in Quebec to produce material for batteries to be used in electric vehicles.

The U.S. automaker also announced a billion-dollar plan to build its new all-electric BrightDrop EV600 van in Ingersoll, Ont., at Canada’s first large-scale EV manufacturing plant for delivery vehicles.

Ford has promised $1.8 billion to retool its sprawling landmark facility in Oakville to build EVs while Fiat Chrysler Automobiles plans to spend up to $1.5 billion at its Windsor Assembly Plant to assemble both plug-in hybrid and battery electric vehicles, with at least one new model in 2025.

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An autoworker stands on the production line for the Honda CRV, at a Honda plant in Alliston, Ont., on March 16. (Chris Young/The Canadian Press)

While Ontario did away with its rebate program for EV purchases, Ottawa offers buyers an upfront discount of up to either $5,000 or $2,500 and sellers then have to claim the incentives to be reimbursed.

Statistics Canada says more than 65,000 new battery-only and plug-in hybrid electric cars were registered in the first nine months of 2021, up from 54,353 in all of 2020 and 56,165 in 2019.

However, they represented only five per cent of new cars registered, compared with three per cent in both 2020 and 2019.

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