Battery sector | Quebec and Ontario could share Honda

Honda is considering a titanic investment in Canada in the battery sector, but unlike the other projects announced so far, that of the Japanese giant could be split between Quebec and Ontario, we have learned. The Press.

Nothing has been resolved yet, but at least two sources familiar with the matter have confirmed to us that the negotiations with the Japanese multinational are serious. Quebec aims to attract everything surrounding the construction of what represents approximately 40% of the cost of a lithium-ion battery found in electric vehicles, the cathode. This is the positive pole of a battery.

The province would thus inherit a cathode materials factory, which could see the light of day in the Bécancour industrial park, where General Motors (GM) and Ford are building similar complexes. The Press was able to confirm this information reported by Radio-Canada.

For its part, Ontario would be in the running for everything related to battery assembly, which includes cell manufacturing, as well as the construction of electric vehicles. It could thus take the lion’s share of the investment planned by the Japanese giant, which would be at least 16 billion.

Honda’s name has appeared on the Quebec register of lobbyists since last summer regarding the “electric vehicle sector.”

“Let’s say that it was not a surprise,” replied the Minister of the Economy, Innovation and Energy, Pierre Fitzgibbon, in an interview with The Press last January, where he was asked about Honda’s interest. We had discussions. What’s going to happen at this point? [on ne le sait pas]. »

The discussions have since continued and have become much more serious, our sources close to the file confirm. However, Honda’s demands are particularly high, we are told, and the budgetary context makes it more difficult to reproduce financial aid as generous as in the past.

For the Ford cathode plant in Bécancour, the Legault government had offered 320 million in the form of an interest-free loan, a good part of which risks being transformed into a forgivable loan. In the case of GM, assistance from Quebec reached approximately 152 million.

A special hook

In the hope of attracting Honda, the Legault government is studying the possibility of offering a piece of its stake in Nemaska ​​Lithium, a flagship company in the Quebec ecosystem 50% owned by the Quebec state. The Press was able to confirm this information revealed by the public broadcaster. The other half of the company is owned by Arcadium Lithium, an American multinational based in Philadelphia.

Nemaska ​​Lithium aims to transform lithium extracted from the Whabouchi mine, approximately 300 km from James Bay, to then produce lithium hydroxide – essential in the manufacture of lithium-ion batteries for electric vehicles – in the industrial park of Bécancour.

Construction of the factory has begun and its start-up is scheduled for 2026. The total bill for the project is estimated at around 2 billion. By being a shareholder of Nemaska ​​Lithium, Honda would ensure a supply of lithium hydroxide. The automobile giant could not benefit from this insurance if it does not establish itself in Quebec.

According to the most recent public transaction surrounding the sale of shares in Nemaska ​​Lithium, in 2022, the Quebec state’s stake in this company would be close to a billion dollars.

Toyota-Honda tensions?

The Legault government’s strategy could, however, make the co-owner of Nemaska ​​Lithium cringe. On the one hand, Arcadium wants to control Nemaska ​​Lithium. On the other hand, the lithium producer already collaborates closely with Toyota, Honda’s great rival in Japan.

“We are still looking for additional sources of lithium, which may include further expansion in Argentina [et] increasing our stake by 50% in Nemaska ​​Lithium”, underlines Arcadium, in its annual report recently filed with the American stock exchange authorities.

The latter also holds a right of first refusal on any transaction concerning the sale of shares held by the Quebec government in Nemaska ​​Lithium. Arcadium would therefore have a say in Quebec’s effort to attract Honda to the province.

“Arcadium Lithium has already indicated to the Quebec government that we wish to increase our stake in Nemaska ​​Lithium beyond 50%,” the company said in a statement sent to The Press. We have not changed our position. »

In Argentina, Toyota owns 25% of a lithium carbonate production complex operated by a company owned by Arcadium. Honda’s Japanese competitor also owns a quarter of another lithium carbonate production site in Japan.

It’s the media Nekki Asia who revealed, last January, Honda’s plans in Canada. In Ontario, several sites are being studied by the Japanese giant, including the one where its Alliston factory is located. During the first month of 2024, representatives of the Japanese multinational traveled to Canada to meet officials from the Trudeau government in order to discuss their ambitions in Canadian territory.

With Francis Vailles, The Press