Honda Canada has hit the brakes on its plan to build a $15-billion electric vehicle plant in Alliston, Ont.
The Japanese carmaker confirmed the development in a statement Thursday after reports surfaced last week that the automaking giant was halting its plans to construct the facility.
The decision to halt the project does not impact current employment or production levels at its Alliston operation, Honda said.
“Honda announced an indefinite suspension of the Canadian value chain investment project in response to evolving business conditions, a change in external resource strategy and shifting customer demand,” its statement reads.
“Based on our revised strategic objectives, we have determined that an indefinite suspension of the value chain project is appropriate at this stage. We will continue reviewing our future procurement and business strategies, while carefully monitoring market conditions.”
The Honda news was “disappointing,” Prime Minister Mark Carney said, adding the company’s decision was likely reinforced by rising prices and technological developments.
“The shift towards lower emission vehicles is certainly progressing globally and likely to progress here,” he told reporters in Ottawa.
“But if those are choices of Canadians, those are choices Canadians will make.”
Canada's competitiveness being 'tested in real time': New Tecumseth mayor
The new EV plant had the potential to create 1,000 jobs, on top of the 4,200 in Alliston. The project was announced in 2024 and production was slated to begin by 2028.
However, Honda announced a two-year pause in 2025, and attributed the delay to the “slowdown of the EV market.”
Under the original plan, the plant was set to produce up to 240,000 vehicles per year when fully operational in 2028.
Two years ago, the plant was one of a series of electric vehicle-related jobs announced by then-prime minister Justin Trudeau and Ontario Premier Doug Ford. The projects were supported through tax credits and direct support from both levels of government.
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Ottawa was set to give the Japanese automaker around $2.5 billion through tax credits, while Ontario committed to providing up to $2.5 billion in support directly and indirectly.
Honda said no money had been transferred to the company for the project – a point Ontario Economic Development Minister Vic Fedeli stressed Thursday.
“We have really firm guardrails and protections for the taxpayer that no money leaves until all the commitments have been made, and that means both in the building commitment and in the job commitment,” he told reporters in Toronto.
“On Honda … they’ve been here 40 years…. Honda makes great products, they’re here to stay and their employees are safe.”
Just last week, the office of Industry Minister Melanie Joly said it was in “regular contact” with Honda regarding the plant.
“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,” a spokesperson for Joly’s office said in an emailed statement.
However, they did not clarify whether Honda had communicated any plans to scale back to Ottawa.
Richard Norcross, Town of New Tecumseth mayor, said Canada’s competitiveness is being “tested in real time,” and called on Ottawa to support Canadian-made vehicles and secure long-term investment.
“New Tecumseth has long been a proud manufacturing community, and we will continue to stand behind that legacy,” he said in a statement.
“We will work directly with Honda and all our manufacturing partners to protect local jobs, sustain our economic base, and ensure opportunities like this are not lost — but brought back stronger. We are ready to do our part. The federal government must do theirs. We need action — now.”
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MP Raquel Dancho, the Conservative shadow minister for industry, added in a separate statement the Liberal government has been “ignoring basic market realities.”
“Honda’s decision comes after years of Liberal mandates and subsidies that have failed to restore confidence, secure investment, or protect Canadian auto jobs,” Dancho said.
“EV demand has not met the government’s expectations, affordability remains a major barrier for Canadian families, and auto companies themselves have warned that the pace of the transition has been overestimated.”
'EV demand has declined considerably': Honda
Honda also announced Thursday it had posted a US$2.7-billion loss, its first-ever full-year loss.
It said losses related to EV operations are estimated to total US$16 billion, incurred mostly in the fiscal year just ended and the current fiscal year.
“EV demand has declined considerably, due to the rollback of environmental regulations in the U.S. and other factors,” Honda said in a separate statement.
U.S. President Donald Trump’s administration has pulled back on incentive programs for EVs and withheld money to states wanting to add more EV charging stations, even as gas prices have soared over the war in Iran.
Trump also blocked California’s stringent electric vehicle mandates last year, backpedalling on the shift to environmental models.
Trump’s tariffs on imported autos and auto parts, although lowered to 15 per cent from the initial 25 per cent, also put a dent in Honda’s profitability.
Honda’s EV project is just one of many that have fizzled out in Canada.
General Motors ended production of its BrightDrop electric delivery van last year, Ford Motor Co. has pivoted from EVs to pickup truck plans at its Oakville, Ont., plant and several battery-related plants have been shelved.
Meanwhile, construction on what will be Canada’s largest EV battery plant began in St. Thomas, Ont., began last October. When operational in 2027, the plant by PowerCo SE — founded by Volkswagen — will see batteries produced for the German automaker’s growing electric vehicle range.
A PowerCo spokesperson told Global News Thursday the company remains focused on delivering the plant.
— with files from Isaac Callan, Colin D’Mello, Uday Rana The Canadian Press and The Associated Press
CarneyFord: Hey Honda, we’re gonna give you $5B when you build the new EV Plant in Alliston. And, just for fun, we’re gonna let 49,000 Chinese EVs into Canada that will be ½ the cost of your EVs.
Honda: Hey, can you see my middle finger?!!!
Don’t worry folks….Ford will grab a CBC camera, pour a couple bottles of Crown Royal on a Honda car and then blame Trump for Canada’s problems.
Funny that one global article says demand on EVs is growing while this one says Honda declared demand for EVs is waning. Even global can’t make up their minds. Libs already drove billions of business out of Canada.
But nevermind that, now skidMark says it’s a good idea to sell public infrastructure such as airports. Piece by piece, Canada is being dismantled by Liberals, our mines and natural resources are already owned by Chinese.
Our own politicians are selling us out but, sure, blame it all on Trump.
Stopped making sht cars .Good
Ha ha ha ha good job Libs! What a bunch of maroons.
OMG, that happens when environmentals are elected and is prioritized in favour of an economy.
Lard Ford and Justin Tru-DOH bet big time and lost billions of Canadian tax payer dollars on their EV wet dream
Is Sugar Daddy Doug going to set a Honda on fire at a press photo op over this, like he poured out a bottle of Crown Royal?
Is he going to ban Honda dealerships too?
Honda can also see that free trade with the USA will be finished soon; it is not hard to see the end of CUSMA with the way Carney and his “elbows up” crowd are alienating the USA. What a shame.
Trudeau is grossly incompetent. He bet billions on Canada EV wet dream and totally failed.
@Duke.
So why have other companies (not Honda) have also bailed out on this. The whole industry is in decline/collapse.
Honda in particular Japan is laggards when it comes to EV and battery tech. Trump has been scaring their EV push since his first term. Now, with the Trump tariff, anything not built in the US, they’re scared again after the assurance during the Biden era. They have lost their world auto markets lead to China due to their lack of EV. And will be further left behind as the market push to more EV due to the Iran gas crisis. Most of Japanese cars are rebranded cars made by other companies. The world is moving on. The US will also be in the same boat. It will pull Canada down as the case with Honda pulling out of their battery plant. Batteries tech are not just for EV, for those idiots who doesn’t know. They are found in tools, electronics to mining earth movers. Battery tech is also not static. Performance and longevity are moving at a crazy phase. The NA will be left behind and will be reliant on Chinese tech. It’s already is. Most EV are using Chinese battery. Trump and the right-nuts are leading North America in the gutter. We will have nothing to sell other than recourse to the world moving towards. Carney knows that, and following Trump is a disaster for us going into the future.
Oh good I can now buy a Chinese ev spy car instead of a Tesla or Honda . Carneys investment portfolio just doubled.
” Elbows up “
I bet the nut-sucker commenters on here will blame Carney
#ElbowsBroken carneys a master of getting every major project canceled 🤡
Where are all the l I b t a r d s now who were throffing at the mouth when the Honda ev plant was announced ???
Oh just mark it down as another Liberal failure ok.
Another big promise of jobs gone before they even got here. This will pave the way for Carney to bring more EVs from China which won’t create jobs in Canada. The big car companies are telling everyone that is listening the market isn’t there for EVs but Carney and this Liberal government is determined to push on even if it means allowing inferior EVs from China in be on our roads. Not to mention we don’t have enough electricity for the demand now.
It isn’t Trumps fault that Canada is high cost and non competitive in many industry sectors.
Another huge failure by the Trudeau and Ford regime. Bet on the wrong horses and now Canadians are on the hook for bilions.
How long before Carney announces a bigger trade deal with China?
Nobody wants your EVs!!!
Liberal policy is literally bankrupting this country! And it’s on purpose!
Once again people blaming the wrong people….
Oil and Gas Industry. Good on Ontario’s, now it is their turn to suffer under poor governance and policy by Trudeau, Ford, and Carney.
All u people bragging about charging your ev.for 8 dollars, How’s that looking now? If honda is pulling out, good luck finding parts in the future.
I moved by business from Ontario to Indiana about 3 years ago. Huge difference. Costs were over the top in Canada. We have saved almost 50%. Canada can blame itself for its high costs, taxes, carbon taxes, and everything else.
There is urgency on Carney to get a trade deal. Honda might pull more ICE vehicles out of Canada and move to the USA where it is more cost beneficial. When is Carney going to deliver on his promises to Canadians.
Elbows up Canada!
So Honda realized that Trudeau and the Liberal plan to have us buy battery powered vehicles was not realistic. About time. I do hope that the 5 billion in support is recouped.
I wonder how long and what cost it will be for Canadians until Carney and the Liberals wake up.