Honda drops $15B Ont. EV plant: reports

Honda is indefinitely shelving its planned $15-billion ($11-billion) electric-vehicle and battery complex in Ontario, a setback for Canada’s ambitions to build a domestic EV supply chain as demand cools and trade war with the U.S. heats up.

The news was reported by the CBC on Wednesday afternoon, citing Japanese media reports. It wasn’t independently verified. It follows Honda’s decision in May 2025 to delay the project by two years to 2030. Honda declined to comment beyond saying it will have an announcement within a couple of weeks, CBC said.

“The sector is challenged because of these global shifts, and what we’re committed to doing is really trying to help protect and preserve the jobs that are related to the U.S. trade side,” Karim Bardeesy, parliamentary secretary to Industry Minister Mélanie Joly, told CBC News Network TV. “We remain in regular contact with Honda and will continue to put Canadians’ interests first.”

The project was to expand the company’s Alliston, Ont., operations with a revamped assembly plant, a standalone battery facility and two component plants. The site was designed to produce as many as 240,000 vehicles a year by the end of the decade while preserving roughly 4,200 jobs and adding about 1,000 more.

According to the reports in Japan, Honda said it is reassessing the timing of the investment as market conditions evolve, pointing to slower-than-expected electric-vehicle uptake across North America and a shift in consumer demand towards hybrid models.

EV strains

The delay highlights growing strain in the EV buildout, where automakers are tempering spending plans amid high costs, uneven policy signals, especially from the U.S. Trump administration, and softer sales growth than forecast. It also comes as Ontario’s government this year shifts its strategy away from EVs to embrace defence metals after being stung with delays following a series of large high-profile investment promises.

LG Energy Solution briefly halted and restructured the $5-billion NextStar plant in Windsor in 2023 when Stellantis pulled out while Volkswagen’s $7-billion PowerCo plant in St. Thomas is progressing more slowly than initially envisioned. 

Ford chose to produce pickup trucks in Oakville, Ont., instead of EVs while General Motors stopped making the BrightDrop electric delivery van last year in the province.

The province had been championing a battery metals corridor straight to electric vehicle plants. However, it’s still backing important projects for EVs, such as by fast-tracking Canada Nickel’s Crawford and Frontier Lithium’s (TSXV: FL; US-OTC: LITOF) PAK, as well as several processing plants, including cobalt. 

Trade issues

The trade battle between Washington and Ottawa can also factor as an impediment to the plant’s construction because Honda’s main market for cars is the much larger U.S. compared to Canada. The two countries are starting to review the their free trade deal, CUSMA, and how it exempts autos.

Separately, the Trump administration’s April 6 tariff adjustments expanded the number of products subject to 50% on core metals steel, aluminum and copper and 25% on most derivatives.

Ottawa and Ontario had committed about $5 billion in incentives to secure the Honda project, part of a broader push to anchor battery manufacturing and downstream processing in Canada.

“Sometimes there’s kind of a delay in these projects coming to deal with consumer preferences, technology, different policies around the world,” Finance Minister Francois Philippe Champagne told reporters in Ottawa on Wednesday. “But I’m still confident that electrification is our North Star.”