Honda hits pause on plans for $15B EV expansion in Alliston, Ont.

Honda Canada announced it was hitting pause on its $15B expansion at the Alliston location.

One month after shutting down rumours that Honda Canada had plans to restructure its manufacturing footprint, the company confirmed it is hitting pause on its plans for a $15 billion electric vehicle (EV) project at its Alliston, Ont. location for two years.

In April 2024, then-prime minister Justin Trudeau and Premier Doug Ford were in Alliston to announce the multi-billion-dollar project which would include a retooled plant, an electric vehicle battery plant nearby, and two critical battery parts facilities spread throughout the province. At the time, Honda said it intended to have the EV plant operating by 2028.

The Japanese automaker’s chief executive made the announcement about the expansion’s halt on Tuesday, citing the fluctuating demand for EVs and uncertainties facing the industry regarding U.S. President Donald Trump’s tariffs on imported vehicles. Honda is reportedly expecting a 70 per cent decline in profit for the fiscal year through March 2026.

“We decided to postpone our large scale investments,” said Toshihiro Mibe, director, president and representative executive officer with Honda Global stated in an announcement on Tuesday. “The automotive industry environment has changed dramatically, requiring more than ever a flexible response.”

Mibe said the company needs to reassess due to financial strain. The automaker reported its annual profit hit 835.8 billion yen ($5.6 billion U.S.), down from 1.1 trillion yen the year prior.

“The electric vehicle market growth has slowed down more than expected ... [The EV plant] was planned to start operation in 2028. But this was in thinking that EV demand would increase in the future,” Mibe said. “So as of now, we think we should postpone for two years. This is decided.

He continued, " If the conditions were to change, at that point in time, we have to revisit this. As for the specifics, what happens after two years and the starting time of the project, we have to observe what is happening and ultimately make the decision.“

The chief executive added Honda is considering transferring auto production to plants south of the border in response to the tariffs.

“We are thinking about the production allocation - optimizing allocation where possible,” Mibe stated. “If the tariff measures are to be in place for a long time, then we will have to increase our production capacity in the United States.”

Mibe touched on the impact that would have on the supply chain. “Because it would be huge. We want to observe what is happening and the appropriate timing and think about what needs to be done. We want to be prudent in such efforts in dealing with tariff measures.”

New Tecumseth Mayor Richard Norcross expressed disappointment by the news that Honda would delay the expansion at the Alliston location.

“We were looking forward to it coming, absolutely, we’ve been working collaboratively with Honda, ” the mayor said in an interview with CTV News. “I’m confident with Honda that they’re going to keep their operations here... Honda’s got over 40 years invested in New Tecumseth, that’s not a relationship I can see anybody walking away from.”

Norcross said he’s encouraged that there was no word about job loss at the Alliston plant. “They said in their press release they will continue operations as normal at the Honda facility -I believe that. I know we will be good and we will get through this together.”

While at an event in Pickering on Tuesday, Ford addressed the news, saying the automaker would continue to move forward with the expansion, noting Honda just needed more time.

“We’re going to hold them accountable, each auto manufacturer, anything that we’ve given them, we’re going to make sure that they’re held accountable and they continue manufacturing automobiles right here in Ontario,” the premier added.

Ontario’s Minister of Economic Development, Job Creation and Trade, Vic Fedeli, issued a statement to CTV News, reassuring that the delayed project wouldn’t impact jobs or current production in Alliston.

“In the face of unprecedented global economic uncertainty, our government has been clear - we will do whatever it takes to protect Ontario’s world-class workers, businesses, and industry. Ontario remains a leader in global auto manufacturing, securing over $46 billion in new investments that will create new, good-paying jobs across the province,” Fedeli wrote.

He added, “We remain in close contact with Honda, who has reaffirmed their commitment to their operations and planned expansion in Ontario and assured us that today’s announcement will have no impact on their current employment levels or production at their manufacturing plant in Alliston.

Our government will continue to fight every single day to protect the progress we have made in our auto-manufacturing sector and secure good-paying jobs and support for workers and their families."

Honda is one of the largest employers in Simcoe County, with an estimated 4,200 workers producing roughly 390,000 vehicles per year.

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