Honda Motor is reportedly set to definitively halt the development of its $15 billion electric vehicle project in Canada, as per Japanese media reports. The automaker initially paused the Alliston, Ont., project in May last year, indicating a two-year review period to assess the EV market before making a decision. Due to sluggish demand for electric vehicles in the U.S., Honda is now shifting focus to prioritize hybrids in its North American strategy.
While Honda Canada has not officially confirmed the news, both provincial and federal officials are engaged in ongoing communication with the company. The project, announced in 2024, was planned to include a vehicle assembly plant and battery production facilities, with substantial financial support from federal and provincial sources amounting to over $5 billion.
Ontario Economic Development Minister Vic Fedeli emphasized that public funds would only be allocated to Honda upon project execution. He reiterated Honda’s commitment to Canada despite challenges in the auto sector related to tariffs and global uncertainties. Prime Minister Mark Carney acknowledged the industry’s challenges, particularly mentioning U.S. tariffs impacting the sector.
The decision by Honda to halt the project aligns with a trend of EV initiatives faltering in Canada, with General Motors discontinuing BrightDrop electric van production and Ford Motor Co. shifting focus to pickup trucks at its Oakville plant. This development has led to criticism from Conservative MP Adam Chambers, who views it as a setback for the government’s EV strategy and emphasizes the importance of securing access to the U.S. vehicle market for the Canadian auto industry’s future sustainability.
In 2021, Honda produced over 400,000 vehicles in Canada, positioning itself as the second-largest producer in the country after Toyota. The production included a mix of conventional gas and hybrid models of Civic and CR-V vehicles.
