Honda weighs plan for major EV plant in Canada: report, illustration photo/ Source: freepik.com

Estimated to cost 2 trillion yen (nearly US$14 billion), the project would represent one of the multinational firm's biggest investments ever, according to Japan's Nikkei news group.

Honda said in response to an AFP query that it is "considering a number of initiatives as we move into the electrified era" but had nothing else to say for now.

Without confirming the Nikkei report, Canadian industry minister Francois-Philippe Champagne told Canada's Global News that it reflected the country's growing reputation as a leader in attracting green investment in the auto industry.

Honda is studying several sites, notably next to one of its factories in Ontario province, Nikkei said. It said the Japanese company is expected to make a decision sometime this year that would allow production to begin in 2028.

In recent years Canada has actively worked to attract manufacturers in the electric-vehicle sector, offering tax breaks and boasting its plentiful renewable energy sources and supplies of rare minerals used in EV batteries.

The Canadian strategy follows the example set by the country's leading trading partner, the United States, whose Inflation Reduction Act of 2022 aims to provide billions of dollars in subsidies for green industries.

Honda announced that year that it plans to build an EV hub in the US state of Ohio, in partnership with LG Energy Solution of South Korea, with a goal of producing EV batteries by 2026.

In 2021, Honda set an ambitious objective for its auto sector of 100 percent EV production by 2040, a goal that will require enormous investment.

But in late October, the Japanese group and its American partner General Motors said they were dropping plans to jointly produce millions of "affordable" electric vehicles by 2027.

EV sales have slowed in the United States amid rising interest rates, but Honda expects that trend to change.

President Joe Biden's administration has set a goal of having 50 percent of all new vehicle sales be electric by 2030.

And the Canadian government of Prime Minister Justin Trudeau recently proposed a target of having 60 percent of new vehicles sold in the country be zero emission by the same year.