Honda plans to spend $3 billion on a new auto plant between its Marysville and East Liberty factories in central Ohio, as Honda announced on November 9th. This new plant has pending government approvals and could create more than 2,000 jobs and build up to 240,000 vehicles annually starting in 2029.
Honda’s fourth Ohio auto plant will prioritize hybrids but will also be able to build gasoline cars and EVs.
Ohio Hybrid-System Capacity Will Rise 250%
Honda is also retooling its Ohio transmission plant to build two next-generation hybrid systems, increasing hybrid-system production capacity there by 250% in the following years, according to its announcement. Honda did not provide a figure on how many they produce or plan to produce.
Together with projects in Ohio, Alabama and Georgia, the new plant is expected to increase Honda’s annual North American production capacity from 1.67 million vehicles to 1.91 million by 2029, according to its investor presentation. That includes about 1.3 million vehicles in the U.S., according to Honda’s announcement.
The wider Ohio investment totals $3.38 billion and is expected to bring 2,390 jobs, according to the state announcement. Ohio’s Tax Credit Authority approved a tax credit for Honda’s new plant on November 9th, although the governor’s office did not give the amount. Honda is also seeking additional financial support from JobsOhio, a nonprofit that helps businesses expand in the state. Details of that support will be released once an agreement is finalized, according to the Ohio governor’s office.
Honda Raises Profit Forecast Despite EV-Related Losses
On November 10th, Honda raised its operating-profit forecast for the fiscal year ending March 2027 by 20%, from about $4.1 billion (650 billion yen) to $4.9 billion (780 billion yen). Strong U.S. hybrid demand and a weaker yen supported the increase, Reuters reported. Honda’s own results also credit strong motorcycle sales.
Yet operating profit for July through September fell 39%, from about 194 billion yen a year earlier to 118 billion yen. Honda’s results show about $3.1 billion (484.8 billion yen) in EV-related losses during the six months through September, all of it booked in the July-to-September quarter. Excluding those losses, Honda’s adjusted operating profit for the quarter more than doubled, from 295.7 billion yen to 602.8 billion yen. Those losses are separate from the investment in the new factory.
Honda also cut its full-year global sales forecast by 7% to 3.16 million vehicles, mainly because of falling sales in China, and said it expects slightly tougher conditions in North America in the second half, Reuters reported.
EVXL previously reported Honda’s cancellation of a planned large electric SUV. Another EVXL article covered Honda’s $2.86 billion agreement to acquire factory buildings and related assets from its Ohio battery venture with LG Energy Solution.
EVXL’s Take
The investment gives Honda more hybrid capacity without committing an entire factory to one powertrain. That’s a reasonable choice while U.S. hybrid demand remains strong and EV restructuring weighs on earnings. It also begs the question, will demand for hybrids stay as high through 2029 and beyond? I’m curious as to what their production forecast will be because with a capacity of 240,000 vehicles you can produce a lot of cars per day. Honda has yet to say which models will be produced there or how many will actually be hybrids.
Sources: Honda, Honda results, Ohio announcement, Reuters, Reuters on LG.
EVXL uses automated tools to support research and source retrieval. All reporting is by Damien Kesteloo, edited by Haye Kesteloo.
