Honda to Postpone EV Investments in Ontario by Two Years, Move Some CR-Vs
Honda said on Tuesday it would postpone by at least two years its large-scale investments to establish an electric vehicle supply chain in Canada.
Originally announced in April of last year, the project is valued at $15 billion, a third of which to be publicly funded. An update of the investment plans will be given during a business briefing on May 20.
The future Honda EV plant and standalone Honda EV battery plant will be located in Alliston near the company's existing manufacturing facilities. There will also be a cathode active material and precursor (CAM/pCAM) processing plant through a joint venture partnership with POSCO Future, as well as a separator plant through a joint venture partnership with Asahi Kasei Corporation.
Honda at the time expected EV production to begin in 2028. Once fully operational, the facility would have a production capacity of 240,000 EVs per year and the EV battery plant would have a capacity of 36 GWh per year.
Blame the U.S. Tariffs
This comes as Honda forecasts a nearly 60-percent drop in net operating profit for the 2025-2026 financial year that began on April 1, mainly due to the new U.S. trade tariffs as well as growing market uncertainty.
Including finished vehicles, auto parts, power products and motorcycles, Honda expects tariffs to cut about 650 billion yen (approx. $6.1 billion) CAD off its operating profit. However, the amount may be adjusted down the line because of parts exemptions.
Honda president Toshihiro Mibe said that the postponement was also due to "flagging EV demand" making it difficult to anticipate further progress. The resumption of the project will depend on how market trends develop, he added.
Some CR-Vs to Move Out of Ontario
In related news, U.S.-bound CR-V units rolling off the line in Alliston will shift their production south of the border, as Automotive News reported on Tuesday. The company is said to be in talks with the Ontario and federal governments, but a spokesperson told us there is no plan to cut total production or workforce in Alliston, suggesting the plant will ramp up output of Canadian-sold vehicles.
On April 15, following rumours out of Japan, Honda Canada assured that “our Canadian manufacturing facility in Alliston, Ontario, will operate at full capacity for the foreseeable future and no changes are being considered at this time. We constantly study options for future contingency planning and utilize short-term production shift strategies when required, to mitigate negative impacts on our business.”
The next day, Ottawa announced that automakers that keep building vehicles in Canada would be spared from countertariffs in an effort to protect their investments in the country.
