Honda Motor Co. said that it is evaluating its EV investment plans in Canada, days after the Japanese automaker announced a 2.5 trillion yen ($15.8 billion) writedown due to shifts in its electrification strategy.
A spokesperson for Honda Canada said the company’s commitment to a C$15 billion ($11 billion) EV production hub in Canada — which was first announced in April 2024 — is being evaluated “as market conditions change.”
Last May, Honda announced it was suspending the program as it reassessed the tariff scenario and amid slower-than-expected EV demand in North America.
The automaker plans to revisit the timeline for the investment in 2027.
“The company will continue to evaluate the timing and project progression as market conditions change,” Ken Chiu said on Friday, in an email sent to Automotive News.
Canada Plans
Honda has described itself as Canada’s second-largest auto manufacturer by volume, with approximately 69% of Honda vehicles sold in Canada built domestically.
The automaker operates a single Canadian manufacturing facility — Honda of Canada Mfg. (HCM) — in Alliston, Ontario, where it has produced vehicles since 1986.
In April 2024, the company announced a C$15 billion EV value chain investment in Alliston, including a new EV assembly plant and battery plant, with production targeted to begin in 2028.
The original plans for Honda’s Canada EV hub included all aspects of manufacturing and the procurement of raw materials for battery production, including a cathode active material and precursor processing and separator plant with the automaker’s other JV partner Asahi Kasei.
Mid-last year, however, the company’s management revealed in an earnings call that external pressures led it to suspend the plan.
Local Production
Canada has recently taken steps to strengthen its auto industry following tensions with the U.S., including a trade deal with China that allows up to 49,000 Chinese-made EVs to enter the country each year.
The country is now looking to attract other international automakers to set up local production through joint ventures with domestic companies — such as Magna.
A few weeks ago, federal Industry Minister Mélanie Joly highlighted Magna International, along with other major Canadian suppliers, as potential candidates to support manufacturing partnerships between Chinese EV companies and so-called “trusted partners.”
The Canadian manufacturer — which has partnered with Chinese automakers for European production at its Magna Steyr facility — said that it is still evaluating its strategy on the new agreement, however.
Ottawa has separately pushed Industry Minister Mélanie Joly to use the deal as leverage for Chinese EV joint ventures that would supply global markets from Canadian plants.
However, BYD — one of three major Chinese automakers preparing to enter Canada — is actively considering building a manufacturing plant and insisting on owning and operating the facility outright.
Canada Scenario
Honda is one of the few international automakers producing vehicles in Canada that is allowed to import a set volume of US-made, USMCA-compliant vehicles without facing the 25% counter-tariff.
These duties were imposed last April in retaliation for the Trump Administration’s country-specific tariffs on Canada, which can reach up to 50% on Canadian imports to the US.
Under the US Surtax Remission Order (Motor Vehicles 2025) — established through section 115 of the Customs Tariff — Ford, GM, Honda, Stellantis, and Toyota can benefit from this remission quota.
The Canadian government is currently reviewing potential changes to the program.
Recently, Canada raised the tariff-free import quota for an unnamed automaker after the company reported stronger-than-expected vehicle sales and higher domestic production in 2025.
This is the first known increase under a remission framework that has mostly been used to penalize automakers reducing Canadian production — something Stellantis and GM experienced last year.
When asked about the order, Industry Minister Mélanie Joly mentioned Honda and Toyota without specifying which company applied.
“When Honda and Toyota increase their production in Canada, we will make sure that they have greater market access,” she stated.
EV Writedown
Earlier this week, Honda halted its electrification plans in the United States, cancelling production of three EV models planned to begin production in Ohio this year.
The US remains Honda‘s top market, accounting for more than two-fifths of its global sales over the last nine months.
The automaker said it expects to report a $15.8 billion impairment in its upcoming earnings, partly related to changes in its EV strategy.
Honda becomes the latest company to report multi-billion-dollar losses tied to a shift in its EV strategy, following Detroit rivals Ford ($20 billion), General Motors ($6 billion), and Stellantis ($26 billion).
The company said that it will lay out a renewed long-term business strategy when it presents full-year results for the fiscal year ending March 2026.
Last month, Honda reported a cumulative operating loss of 166.4 billion yen ($1.07 billion) in its automotive business for the period from April to December 2025.
Honda announced last year it was scrapping its plan to have 30% of its global vehicle sales be electric vehicles by 2030, as it scaled back its electrification strategy.
