Al Root
Demand growth for battery electric vehicles is slowing down, and Tesla stock has lost billions of dollars in market value this year. Despite it all, the auto industry remains committed to a battery-powered future.
Thursday, Honda Motor announced a new $11 billion investment in Canada to strengthen its North American EV supply chain.
The investment should include an assembly plant and battery plant in Alliston, Ontario, as well as a battery cathode joint venture facility. A cathode is one-half of a battery that facilitates electric charge. The cathode includes materials investors hear about such as lithium, iron, cobalt, nickel, and others.
Honda is also retooling an assembly plant and battery plant in Ohio. The cost for both projects is about $5.1 billion. Battery partner LG Energy Solution will pay for part of the $4.4 billion battery plant.
"Honda is making steady progress to our goal to make battery electric and fuel cell electric vehicles represent 100% of our business by 2040," said Honda CEO Toshihiro Mibe at a news conference.
Canada wants all light-duty cars sold to be zero emission by 2035.
The investment is a reminder that the global auto industry still plans to produce many more electric vehicles. Battery electric vehicle sales growth decelerated to below 10% in the first quarter from the same time a year ago and from about 35% growth in the fourth quarter of 2023.
A lack of affordable battery-electric models, charging infrastructure, and a surge in hybrid demand are responsible for the battery-electric slowdown.
Honda's American depositary receipts were down 2.6% in early trading. The market is responsible for most of that decline. The S&P 500 and Nasdaq Composite were down 1.2% and 1.5%, respectively.
Tesla stock was up 1.7% at $164.92, continuing its post-earnings rally. Shares rose 11.8% on Wednesday following the company's Tuesday evening report.
Write to Al Root at allen.root@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 25, 2024 11:06 ET (15:06 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
Comments