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 office of Industry Minister Melanie Joly said last week that 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.
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“We remain in regular contact with Honda and will continue to put Canadians’ interest first.”
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, the project was delayed, with Honda announcing a two-year pause in 2025. At the time, Honda 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.
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 on Thursday also announced 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.
— with files from Isaac Callan, Colin D’Mello, Uday Rana and The Associated Press
© 2026 Global News, a division of Corus Entertainment Inc.
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