Workers assemble a vehicle at a Honda assembly plant in Alliston, Ont., in 2024.Carlos Osorio/Reuters
Japanese automaker Honda Motor Co. Ltd. HMC-N has indefinitely suspended a $15-billion plan to build an electric-vehicle complex in Ontario, according to a report, as U.S. tariffs and domestic policies continue to upend the auto sector.
Honda announced the project in 2024 and suspended it for two years in 2025 amid slowing demand for EVs, U.S. import taxes and changes to U.S. policies that made purchases of emissions-free cars less affordable.
Japan’s Nikkei news agency reported on Tuesday that Honda is about to make the suspension indefinite, with the possibility of scrapping it altogether.
Honda Canada spokesman Ken Chiu did not address questions on the plan’s future. “We have nothing to report at this time,” he said, repeating a statement issued a year ago when the suspension was announced: “The company will continue to evaluate the timing and project progression as market conditions change.”
The project included an EV and battery plant in Alliston, Ont., where Honda has a factory, as well as related projects elsewhere in the province in partnership with South Korea’s POSCO Future M Co. and Japan-based Asahi Kasei Corp. When the project was announced, Honda said it would create at least 1,000 jobs.
EV sales on upswing as incentives, Mideast conflict drive buyer interest
Richard Norcross, the mayor of New Tecumseth, which includes Alliston, said he has not received any word from the automaker on the EV project’s future. “We’re certainly going to do everything we can to keep them here,” he said by phone.
Gabrielle Landry, a spokeswoman for Industry Minister Mélanie Joly, said global automakers are facing “significant change.”
“American tariffs and changes to U.S. domestic policies are creating real pressures for automakers, prompting some to delay or scale back investments in electric vehicle and battery projects,” she said. “We remain in regular contact with Honda and will continue to put Canadians’ interest first.”
Prime Minister Mark Carney told reporters in Ottawa on Wednesday morning that the uncertainty in Canada’s auto sector is caused by the “unjustified” U.S. tariffs, and that Canada is working to get the best trade deal possible ahead of the review of the U.S.-Mexico-Canada Agreement.
“We continue to work with companies in the sector, helping them reposition, reinvest, supporting workers there,” Mr. Carney said, without naming Honda. “We’ll continue to do what’s necessary.”
Mr. Carney recently announced measures to bolster Canada’s EV supply chain, including tougher emissions standards aimed at boosting EV sales to 75 per cent of total vehicle sales by 2035 and 90 per cent by 2040. The government also reintroduced consumer incentives of as much as $5,000 for battery electric and gas hybrids with a sales price of up to $50,000, made by countries with which Canada has a free-trade deal. For made-in-Canada EVs, there is no price cap on the sales value.
How the arrival of Chinese EVs in Canada might lead to cheaper cars
Still, Ontario auto plants mainly serve the U.S. market, where tariffs on imported cars and the loss of incentives has hit sales. U.S. EV sales fell by 26 per cent in the first three months of 2026, year over year, according to Cox Automotive’s Kelley Blue Book.
Annual sales of zero-emissions cars in Canada 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.
“It’s possible that EVs will become much greater in numbers, but the market demand is not there and these individual manufacturers are choosing to delay or slow their EV production,” said Adam Chambers, a Conservative member of Parliament from Ontario.
The report of the Honda project’s possible end was the subject of debate in the Ontario Legislature on Wednesday, where NDP Leader Marit Stiles said, “The Premier clearly has no plan to stop jobs – good jobs – from leaving in this province.”
Automakers have taken billions in writedowns as they abandoned or scaled back plans to boost EV production, cancelling models and partnerships.
Honda in March said it would restructure its EV business – mainly in the flagging U.S. market – in a shift that could cost US$15.7-billion.
In February, Stellantis NV handed its stake in the NextStar EV battery plant in Windsor, Ont., to partner LG Energy Solution for a nominal US$100. The factory has widened its production to include data-centre storage.
General Motors Co. said in January it would take a US$4.2-billion charge to unwind EV supplier contracts. The automaker last year closed its BrightDrop electric delivery van plant in Ingersoll, Ont., cutting more than 1,000 jobs.
Ford Motor Co. has cancelled several EVs, including the F-150 Lighting pickup truck, as it took US$19.5-billion in charges.
With reports from Marieke Welsh and Jeff Gray