Honda Canada is postponing a $15-billion electric vehicle investment project in Ontario, including a proposed EV battery plant and retooled vehicle assembly facility.
Honda said it would put on hold for approximately two years a plan announced with great fanfare by Canadian politicians in April 2024 to build an EV supply chain in Alliston, Ont.
“Due to the recent slowdown of the EV market, Honda Motor has announced an approximate two-year postponement of the comprehensive value chain investment project in Canada. The company will continue to evaluate the timing and project progression as market conditions change,” Honda Canada spokesperson Ken Chiu told CBC News in an email statement Tuesday.
Honda also said the decision “has no impact” on current employment or production at the Alliston manufacturing facility.
Honda’s forecast is the latest signal of the difficulty car makers are having navigating Trump’s tariffs on foreign-made automobiles at the same time the industry is being hit by the rise of Chinese EV producers. The decision also came as Japan’s Honda Motor Co. forecast a 59 per cent profit decrease in the current financial year.
Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, said the decision shows how U.S. tariffs continue to be felt in the auto industry.
“We hope to find a solution for Canada soon that restores the confidence Honda had when it made its historic EV expansion decision here,” Volpe wrote in an email statement.
Honda to invest $15B to build 4 new EV plants in Ontario
Ontario Premier Doug Ford told reporters at a press conference that he was confident Honda would continue making cars in the province.
“When I talked to Honda, they promised us they’re going to continue on with that expansion,” Ford said of the pause.
Honda’s EV project in Canada includes a retooled assembly plant, an electric vehicle battery plant in close proximity, as well as two key battery parts facilities located elsewhere in Ontario.
The project was expected to see the two main plants create 1,000 jobs on top of retaining the existing 4,200 jobs at the assembly plant.
Under the original plan, the plant was set to produce up to 240,000 vehicles per year when fully operational in 2028.
The project was first announced in April 2024 at an event that included then-prime minister Justin Trudeau and Ontario Premier Doug Ford and was to receive support from the federal and Ontario governments.
Ottawa was set to give the Japanese automaker around $2.5 billion through tax credits, while Ontario committed to provide up to $2.5 billion in support directly and indirectly.
Talks between Honda and Nissan to merge broke off earlier this year, although the two still have an agreement to co-operate on technology.
“Although the automotive industry is in a very difficult situation, we will definitely look for new directions of growth through strategic partnerships,” Toshihiro Mibe, Honda’s chief executive, told a news conference on Tuesday.
