But Honda Canada spokesman Ken Chiu said the company has no plans to cut overall production or jobs in Canada, and the company is shifting which vehicles are based on tariffs.
“We basically exchanged export destinations for a small portion of CRVs between our factories,” he said in an email. He said the decision to postpone the electric vehicle project, which includes the battery plant, the redecoration line and two other plants, had no impact on the 4,200 people currently working at the Honda manufacturing plant in Alliston, Ontario.
The decision even though electric vehicle sales are indeed growing and occupying more market share. In Canada, zero-emission vehicles, including hybrids, accounted for 15.4% of sales last year, up from 10.7% in the same period last year. All-electric vehicles account for 11.4% of sales. In the U.S., EV sales increased by 7.3% from the same period last year, accounting for 8.1% of total sales, according to Cox Automotive. It expects that one of every four cars sold this year may be charged in some way.
But despite the growth, demand doesn’t meet some expectations that have committed more than C$46 billion in spending in Canada since the late 2020s. Industry pressure has already caused many automakers to withdraw their electric vehicle plans, even before Trump was elected.
Last year, Ford Motor Co. delayed production of electric SUVs in Oakville, Ontario, and Umicore said it had stopped spending on a $2.8 billion battery material plant in eastern Ontario.
The future of Northvolt’s battery project in Quebec is also not clear after the parent company declared bankruptcy in Sweden in March. Just last month, GM temporarily ruled hundreds of workers in its Ingersoll, Ontario, which produced electric delivery vans because it sold less than hope.
Honda’s decision has impacted plans for projected 1,000 jobs as it reports profits fell due to tariffs, more. The company said Trump’s tariffs are expected to cut $4.4 billion from operating profits this fiscal year, mainly because it has a lot of vehicles coming into the U.S. from Canada and Mexico, the company said.
Ontario Prime Minister Doug Ford said Honda assured him that it remains committed to the EV project.
“I’ve spoken with Honda and they’ve assured us they’ll continue to expand,” Ford said at an event in Pickering, Ontario. He said he believes Prime Minister Mark Carney can reach a trade deal with Trump to create a mutually beneficial relationship that has been growing since the first automatic agreement sixty years ago.
Flavio Volpe, head of the Auto Parts Manufacturers Association, said the pullback in electric vehicle development showed an intensified tariffs. He said Honda’s commitment last year represented a massive vote of confidence in the Canadian supply base, which he hopes will see. “We hope to find a solution to Canada to restore confidence in ambitious projects. All Canadian cars benefit from Honda’s ongoing commitments that have benefited greatly over 40 years,” Volpe said.
The project, first announced in April 2024, includes then-Prime Minister Justin Trudeau and Ontario Prime Minister Doug Ford, and will receive support from the federal and Ontario governments, totaling approximately CAD$5 billion.
Although some electric vehicle projects have been stumbled upon in Canada, others are still moving forward. A joint venture between Stelantis and LG is close to the battery plant in Windsor, Ontario and Volkswagen Powerco is about to be completed. Its large Gigafactory is still being built in St. Thomas, Ontario, with initial production expected in 2027. The company noted that the plant will follow a demand-based commercial production speed.
