Honda employees work along the vehicle assembly line in Alliston, Ont., in 2024.Nathan Denette/The Canadian Press
Honda Canada HMC-N confirmed it is shelving its $15-billion plan to build an electric vehicle complex in Ontario, citing changing customer tastes.
The automaker on Thursday said it has “indefinitely suspended” the project, which would have included four new plants, including an electric car and battery factories, and created 1,000 jobs.
The carmaker cited “evolving business conditions, a change in external resource strategy and shifting customer demand” for the move to scrap the plan, first reported by Japan’s Nikkei news agency last week.
“Based on our revised strategic objectives, we have determined that an indefinite suspension of the value chain project is appropriate at this stage,” Honda said in a statement.
Honda posts first-ever annual loss as EV strategy falters
Federal and Ontario governments committed millions of dollars to the project, but Honda said it has received no public funding for it.
Demand for EVs has slipped as U.S. policy makers dropped consumer incentives and emissions standards. Although EVs are in strong demand worldwide, auto plants in Canada mainly serve U.S. markets. The U.S. applies a 25-per-cent tariff on the non-U.S. content of cars made in Canada, saddling importers with additional costs.
Honda made 400,000 Civics and CRVs at its Alliston, Ont., plant in 2025 and said Thursday it is committed to Canada for the long term. The plant employs 4,200 people.
Richard Norcross, the Mayor of New Tecumseth, where Honda’s Alliston plant is located, said he is disappointed by Honda’s decision but remains hopeful the plan will eventually go forward. He said he plans to continue pressing the federal government to see the project move forward and pledged his support for whatever Honda needs.
Prime Minister Mark Carney says it's disappointing that Honda is indefinitely suspending plants to build a $15-billion electric vehicle plant in Ontario, but says he remains optimistic on the future growth of the EV market.
The Canadian Press
“I still think we can come out the other side,” Mr. Norcross said by phone, “and I think we can make this work, and we’re going do everything we possibly can to make it work.”
Honda announced its EV plans for Ontario in 2024, but delayed it last year as the market slowed. The project was to include joint ventures with POSCO Future M Co. Ltd. and Asahi Kasei Corp., which would have built plants to make battery components. The EV assembly plant was to open in 2028 with the capacity to make 240,000 cars a year.
Tokyo-based Honda said in March it would restructure its EV business – mainly in the U.S. market – in a shift that could cost US$15.7-billion.
Other automakers, including Stellantis STLA-N, Ford Motor Co. F-N and General Motors Co. GD-N have taken billions in writedowns as they have abandoned or scaled back plans to boost EV production.
Sales of emissions-free cars in the U.S. fell by 26 per cent in the first quarter of 2026, year over year, according to Cox Automotive’s Kelley Blue Book. In Canada, sales of EVs fell by 36 per cent in 2025 to 170,000 and accounted for less than 9 per cent of overall sales, according to Statistics Canada.