Honda Canada has decided to delay its planned $15 billion investment in electric vehicle production in Ontario due to U.S. tariffs and the slowdown in EV market. On Tuesday, the company stated that it would postpone its Ontario plans by two years, halting work on its battery plant and suspending the retooling of its vehicle assembly facility and two battery component factories.
“The company will continue to evaluate the timing and project progression as market conditions change,” Honda added.
Honda clarified that the decision will not impact current employment or production at its Alliston manufacturing facility.
Announced in April 2024 at an event attended by former Prime Minister Justin Trudeau and Ontario Premier Doug Ford, the project was set to receive backing from both the federal and provincial governments. It was expected to generate 1,000 new jobs while maintaining the existing 4,200 positions at the assembly plant.
The plant was projected to reach full operational capacity by 2028, with an annual production of up to 240,000 vehicles.
The Canadian federal government planned to allocate approximately $2.5 billion in tax credits to the Japanese automaker, while Ontario pledged up to $2.5 billion in direct and indirect support. However, Jennifer Cunliffe, spokesperson for Ontario’s minister of economic development, job creation, and trade, stated that the province has not yet distributed any funds to Honda.
Honda CEO Toshihiro Mibe noted that the electric vehicle market’s growth has not met earlier expectations, creating uncertainty about future developments. As a result, Honda has chosen to delay its large-scale investments in Canada. He also addressed merger discussions with Nissan, noting that although there was some hope for a revival after previous negotiations had collapsed, the talks are now off the table. Honda is now focused on navigating the challenging business landscape, including the impact of U.S. tariffs.
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