Honda Motor Corporation is reportedly planning to indefinitely suspend the development of its $15 billion electric vehicle complex in Canada, as per reports from Japanese media outlets. The project, located in Alliston, Ont., was put on hold in May last year with the intention to reassess the EV market in two years before making a final decision.
The decision to freeze the Canadian EV investment is attributed to sluggish demand for electric vehicles in the United States, prompting Honda to prioritize hybrids as the centerpiece of its strategy in North America. In response to inquiries, Honda Canada has refrained from providing any official comments at this time.
The project, announced in 2024, aimed to establish a vehicle assembly plant and battery production facilities, with anticipated funding of over $5 billion from federal and provincial sources. Ontario’s Economic Development Minister, Vic Fedeli, emphasized that public funds would only be allocated to Honda upon the project’s progression. He underscored Honda’s commitment to Canada despite acknowledging challenges in the automotive sector due to tariffs and global uncertainties.
Prime Minister Mark Carney acknowledged the industry’s challenges, particularly referencing unjustified U.S. tariffs impacting the auto sector. He reiterated the government’s dedication to supporting companies in the industry and securing favorable deals for Canada’s interests.
The decision by Honda to halt development aligns with a trend of several EV projects fizzling out in Canada, with General Motors discontinuing BrightDrop electric van production and Ford Motor Co. shifting focus from EVs to pickup trucks. Conservative MP Adam Chambers criticized the Liberal government’s EV policy, advocating for a strategic approach to maintain a competitive Canadian auto industry.
Despite the setback in the EV sector, Honda remains a significant player in Canadian automotive production, manufacturing over 400,000 vehicles last year, including both traditional gas-powered and hybrid models of its popular Civic and CR-V vehicles.