Honda Postpones Canadian EV Production, Denies That CR-V Production Will Go to U.S.
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Honda Canada will postpone a $15 billion plan to build electric vehicles in Ontario by around two years. However, the automaker’s decision does not affect current production at its Alliston, Ont., plant.
“Due to the recent slowdown of the EV market, Honda Motor has announced an approximate two-year postponement of the comprehensive value chain investment project in Canada,” Ken Chiu, Honda Canada’s supervisor for corporate communications, told AutoTrader in a statement.
Chiu added that the automaker will “continue to evaluate the timing and project progression as market conditions change.” Honda announced its plan to build EV manufacturing infrastructure in Ontario just over a year ago.
The facility is supposed to be erected near the automaker's Alliston plant, and will include an EV manufacturing facility, a battery plant, and two battery parts plants. Vehicle production was initially set to begin in 2028 but will now start no earlier than 2030. In all, the new facilities will need 1,000 workers to function, on top of the 4,200 workers who already build internal combustion vehicles for Honda in the province.
Honda Canada says that its decision to push back its EV manufacturing plans in Ontario will have no impact on existing vehicle production. Chiu denied a report from The New York Times (which has now been corrected) that tariffs had encouraged the automaker to shift production of the CR-V away from Alliston and to the United States.
“Honda continually looks for ways to very carefully optimize production to meet customer needs and market conditions,” Chiu told AutoTrader. “Regardless of potential future shifts in model production location, there are no plans to decrease overall HCM production volume or employment.”
Honda is just one of many automakers that overestimated how quickly demand for EVs would grow and is now reevaluating its position. Sales of EVs have struggled in the face of a weakening economy, as buyers prioritize affordability when shopping for a new vehicle.
A relatively new technology, automakers are still in the process of researching and developing electric vehicles, which makes them more expensive to produce than vehicles powered by internal combustion engines, which benefit from over a century of development.
Adding to electric vehicles’ troubles on the sales charts are the recent pauses that governments across the country have made to their incentive funds for zero-emission vehicles (iZEV). At the start of the year, the federal government announced that its iZEV fund had run out of money and has yet to confirm whether it will be funded again. Similarly, British Columbia recently announced that its tax benefit program for EV buyers was going on hold, effectively increasing the price of certain EVs by thousands of dollars overnight for consumers.
Ontario Premier Doug Ford, who ended his province’s zero-emission vehicle incentive program when he entered office in 2018, told the CBC that he will ensure automakers that pull production out of Ontario “are held accountable. He did not provide any details on how his government will accomplish that.
