Honda Motor is considering investing up to $18.4 billion in an electric vehicle factory in Canada, according to a report by a Japanese media outlet.

Nikkei Asia said on Sunday that Honda is considering building a car and battery factory in the country as part of efforts to catch up with the electric vehicle market.

The report explained that Honda is looking at several sites, including next to its existing factory in Alliston, Ontario, with a potential investment decision expected by the end of the year.

Honda did not immediately respond to a request for comment, and a spokesperson for Industry Minister François-Philippe Champagne did not confirm whether there are any ongoing talks between the company and the government.

The minister said in a statement that the report about Honda's potential investment is "a testament to Canada's growing reputation as a preferred green supplier and a global leader in electric vehicles."

Champagne said in the statement, "Reports regarding Honda's ambition to make a major investment in Canada speak to the quality of the workforce and the strength of our industry."

The Nikkei report said that the abundance of renewable energy in the country is part of the reason Honda is considering Canada, while the federal government mandated in December that all passenger car sales be electric by 2035.

Honda is retrofitting a production plant in Ohio to produce electric vehicles and has an existing agreement to build an electric vehicle battery factory in the state with LG Energy Solution, but the report says the company may do this alone at the battery factory in Canada.

LG has already partnered with automaker Stellantis to build a $5 billion battery plant in Windsor, Ontario, one of the many major electric vehicle investments Canada has attracted after offering generous subsidies.

Volkswagen is building a battery plant in St. Thomas, Ontario, and Northvolt is building another factory about 30 kilometers east of Montreal, with the three plants expected to cost tens of billions of dollars in subsidies largely tied to production volume.

Honda announced in 2022 that it is investing $1.38 billion to partially upgrade its Alliston plant to prepare it as the main factory for its hybrid crossover CR-V.

The company will launch this year only the sale of its first fully electric vehicle in Canada, the Prologue, with limited quantities expected in the first production year.