Honda Canada postpone an electric vehicle investment project of $ 15 billion in Ontario, including a proposed EV battery plant and an assembly installation of redesigned vehicles.
The company said it would put the plan to build the EV supply chain in Alliston, Ontario. – First announced with large fanfare by Canadian politicians in April 2024 – waiting for about two years.
“Due to the recent deceleration of the EV Market, Honda Motor has announced an approximately two -year postponement of the Integral Investment Project of the Value Chain in Canada. The company will continue to evaluate the moment and the progression of the project as the market conditions change,” said Honda Canada spokesman Ken Chiu, to CBC News in an email statement on Tuesday.
Honda also said that the decision “has no impact” on current employment or production at the Alliston manufacturing center.
The Honda EV project in Canada includes a redesigned assembly plant, a battery battery plant in the vicinity, as well as two key facilities of battery pieces located in other parts of ontarium.
The project was expected to see the two main plants create 1,000 jobs in addition to retaining the 4,200 jobs existing in the assembly plant.
According to the original plan, the plant produced up to 240,000 vehicles per year when it is completely operational in 2028.
The project was announced for the first time in April 2024 in an event that included the then Prime Minister Justin Trudeau and the Prime Minister of Ontario, Doug Ford, and had to receive the support of federal and ontarium governments.
Prime Minister Doug Ford says that he will hold car manufacturers and ensure that they continue making vehicles in Ontario after Honda postponed an important EV project in the province.
Ottawa was ready to grant the Japanese car manufacturer about $ 2.5 billion through tax credits, while Ontario promised to provide up to $ 2.5 billion in directly and indirectly support.
Ford told reporters at a press conference that he was confident that Honda would continue to make cars in the province.
“When I talked to Honda, they promised us that they continued with that expansion,” Ford said on the pause. “So we will see how that progresses. But we are very sure that we will continue to produce Honda vehicles here in Ontario.”
The prime minister also said that he would support car manufacturers who withdraw from Ontario “Responsible”, if that happens.
Flavio Volpe, president of the Association of Automotive Parties manufacturers, said that Tuesday’s decision shows how US rates continue to be in the automotive industry.
“We hope to find a solution for Canada soon to restore the confidence that Honda had when he made his historic decision to expand EV here,” Volpe wrote in an email statement.
The agreement includes the construction of the first assembly plant of Honda electric vehicles, as well as an independent EV battery plant in the Honda facilities in Alliston, ONT. Chris Glover of CBC has the details.
Tariffs and smaller appetite for electric vehicles that have an impact
In informing their last financial results on Tuesday, Honda Motor Co. He said that his profits for the financial year until March fell 24.5 percent compared to the previous year and warned that the tariffs of the president of the United States, Donald Trump, will worsen their profits.
Tokyo’s headquarters -based car manufacturer said 835.8 billion yen (around $ 8 billion CDN), below 1.1 billion yen in the previous year. Annual sales increased 6.2 percent to almost 21.69 billion yen (about $ 205 billion).
The authorities emphasized the important uncertainties, but said they felt it was important to give a realistic projection, regardless of how pessimistic it could be.
Executive President Toshihiro Mibe said that Honda will do everything possible to minimize the impact of tariffs. In the long term, Honda will transfer car production to US plants and rethink their investment plans. All decisions will be made “very careful,” Mibe told journalists.
David Adams, president and CEO of Global Faulakers of Canada, says that while the tariffs were a factor in today’s announcement, the absorption of EV slower than expected also probably played an important role.
“Is electrification advancing? Of course, is it. Consumers continue to buy EV? Yes,” said Adams. “But we are not seeing the type of [rapid] Absorption of electric vehicles that … environmentalists and some in the government anticipated. “
Despite that, Adams says that EVs remain the path of the future: he says that Billions have spent worldwide to move from traditional internal combustion engines to electric battery, and car manufacturers will simply not move away from those commitments. “But those investments could not reach a good term as fast as perhaps it would have been originally anticipated.”
Adams says that the government expects its sales target of zero emission vehicles, whose objective is to achieve 100 % sales of zero emission vehicles by 2035, given the amount of flow that the industry is happening with US tariffs and the slowest absorption of electric vehicles by consumers.
