Honda announced Monday that it will commit $3 billion toward constructing a fresh assembly facility in Ohio, marking the company's first new US vehicle manufacturing plant since 2008. The facility, positioned between Honda's current operations in Marysville and East Liberty, will commence operations in 2029 and reach an annual production capacity of 240,000 vehicles.
The plant will prioritize hybrid vehicles, though it will retain the capability to manufacture both conventional petrol and electric models. According to Honda, the project will generate over 2,000 employment opportunities and raise the company's total US manufacturing capacity to approximately 1.3 million vehicles annually. Bob Nelson, an American Honda executive vice president, stated that it represents "one of the most significant commitments in our history."
Retreating from electric vehicles
The Ohio investment reflects Honda's strategic shift away from battery-powered vehicles. In March, the company eliminated its EV lineup intended for North America, and in May indefinitely postponed an $11 billion joint venture focused on electric vehicle and battery development in Canada, according to CNBC. Notably, Honda's existing battery manufacturing facility in Ohio, originally designed to support those scrapped EV programs, has been repurposed to produce batteries for data centre applications.
Honda is charting a course toward hybrid technology, planning to introduce 15 new hybrid models globally by 2030. The company is simultaneously scaling up hybrid engine and transmission manufacturing across its facilities in Ohio, Alabama, and Georgia. This strategy aligns with market dynamics, as hybrid vehicles continue gaining traction in the American market, enabling Toyota to narrow the gap with General Motors in overall sales rankings.
Tariff pressures reshape manufacturing
The decision to expand domestic production capacity reflects broader industry trends driven by trade policy concerns. Manufacturers are increasingly establishing US-based operations to mitigate the impact of tariffs, which have already contributed to the discontinuation of approximately a dozen electric vehicle models throughout the year. Audi disclosed last month plans to invest more than $4 billion in its inaugural US manufacturing facility, located in Georgia, while Toyota is redirecting its pickup truck production toward Texas.
Honda has previously cautioned that a potential doubling of US tariffs on Canadian vehicles to 50 percent beginning in January would prove "catastrophic" for the company's operations.
Source: The Next Web
