Why Is Honda Still Suspending $15 Billion EV Factory in Canada?
May 8, 20263 hours
Zachary Shahan
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Last May, Honda decided to “suspend” a massive EV factory it had planned to build in Canada, a blow to the North American EV market and overall EV transition. But why?
“There are challenges with the US tariffs, unjustified tariffs in the auto sector,” Prime Minister Mark Carney said in May 2025. “We’ll continue to work with companies in the sector, helping them reposition, reinvest, supporting workers there. We’ll continue to do what’s necessary, including getting the right deal in Canada’s interest.” In other words, the US tariffs suck and are hurting the auto industry, but the head of Canada wanted to improve the situation, somehow, someday. A year later … well, things still suck.
In fact, since then, Trump anti-EV policies have just made the situation worse. “Honda Motor plans to more definitively halt development on its $15-billion electric vehicle complex in Canada, according to multiple news reports by Japanese media,” Canada’s CBC reports.
“Sluggish US demand for EVs is leading the automaker to freeze the Canadian EV investment and make hybrids the centre of its North American strategy, according to the reports.”
So, the following were the two key reasons/excuses mentioned:
- Challenges to the auto industry from Trump tariffs
- Weak US demand for electric vehicles following Trump-led policy changes
Notice a common thread there?
This was initially called a “pause” or “suspension,” not a cancellation. In theory, the EV factory will eventually get built and go online. That said, a year later, the factory is still in suspension mode … and it’s gone from a two-year suspension to an indefinite one.
There is no mention of the possibility that Chinese EV companies will come into the Canadian market and significantly increase the level of competitiveness in the EV market. Perhaps that’s a factor as well, but it seems more like a side issue or cherry on top compared to the core issues in the market.
“American tariffs and changes to US domestic policies are creating real pressures for automakers, prompting some to delay or scale back investments in electric vehicle and battery projects,” Gabrielle Landry, spokesperson for federal Industry Minister Mélanie Joly, summarized. Unless something serious changes in that regard, it looks like there will be no Honda EV production in Canada.
“Honda’s reported decision to halt development is just one of many EV projects that have fizzled out in Canada,” the CBC adds. GM/BrightDrop and Ford have canceled EV plans in the country, and various battery projects have been suspended/delayed.
Honda is the second largest auto producer in Canada (in terms of volume), only trailing Toyota. The company currently produces gas and conventional hybrid Civic and CR-V vehicles.
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