Honda Canada postpones $15-billion electric vehicle project in Ontario

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 Canada spokesman Ken Chiu told The Canadian Press due to the recent slowdown in the EV market, Honda has announced an approximate two-year postponement of the comprehensive value chain investment project in Canada.

Chiu says the company will continue to evaluate the timing and project progression as market conditions change.

The news comes as Honda’s profit for the fiscal year through March slipped 24.5 per cent from the previous year, as its vehicle sales in China dropped. The Japanese automaker warned Tuesday that U.S. President Donald Trump’s tariffs will worsen its earnings.

Honda Canada announced in April 2024 its intentions to build an electric vehicle battery plant near its auto manufacturing facility in Alliston, Ont.

Chiu said Tuesday’s decision does not impact current employment at the Honda manufacturing plant in Alliston, Ont.

Honda’s EV project in Canada includes a retooled assembly plant, an electric vehicle battery plant in close proximity, and two key battery parts facilities located elsewhere in Ontario.

“When I’ve talked to Honda, they’ve promised us they’re continuing on with their expansion, they’re going to continue moving that facility forward,” said Premier Doug Ford on Tuesday. “We’re very confident that we’ll continue producing Honda vehicles here in Ontario.”

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Last month, Honda released a statement refuting reports that it planned to move some of its production from its plant in Alliston, Ont., to the U.S. in response to Trump’s tariffs.

The report by the Nikkei financial newspaper said the company was considering shifting enough Honda CR-V and Honda Civic production to the U.S. to meet 90 per cent of U.S. sales with vehicles produced there.

Chief Executive Toshihiro Mibe said Honda will do its best to minimize the impact of tariffs. In the long term, Honda will transfer auto production to U.S. plants and rethink its investment plans.

He also said Honda was sticking to its plans to produce more electric vehicles.

“Although the automotive industry is in a very difficult situation, we will definitely look for new directions of growth through strategic partnership,” Mibe said at a press conference.

Honda and Nissan announced in December that they would hold talks to set up a joint holding company. Mitsubishi Motors Corp., another Japanese automaker, had said it was considering joining that group. However, the plans quickly unravelled, with Nissan saying it wanted out because it would be at a disadvantage.

Honda is projecting a 70 per cent plummet in profit for the fiscal year through March 2026, at 250 billion yen ($1.7 billion), on 20.3 trillion yen ($137 billion) in sales, down six per cent.

Nissan announced on Tuesday that the company is slashing about 15 per cent of its global workforce, or about 20,000 employees, as the Japanese automaker reported a loss for the fiscal year.

With files from The Associated Press