The new factory, to be run by Dongfeng Honda Automobile, its joint venture with Chinese partner Dongfeng Motor Group, will cost 4 billion yuan (US$629 million) and is expected to begin operation in 2024.

Plans call for producing 120,000 vehicles a year at first, including Honda’s new e:N brand of EVs debuting this spring. The move will bring Wuhan-based Dongfeng Honda’s total output capacity to 840,000 vehicles.

Honda will consider expanding the new plant in response to higher demand.

The Japanese automaker in October said it will sell only electric and hybrid vehicles in China starting in 2030.

It plans to add another 120,000 vehicles worth of EV production capacity as early as 2024 under Guangzhou-based joint venture Guangqi Honda Automobile, according to a roughly 3 billion yuan proposal submitted to local authorities.

Dongfeng Honda and Guangqi Honda will release the EVs bearing the Honda logo in China this spring. Honda looks to convert some existing production lines for gasoline-powered vehicles to EVs to boost output capacity and drive further sales.