Honda halts $15B Ontario EV complex after first loss since 1957

Honda has indefinitely suspended its $15-billion plan to build an electric vehicle complex in Ontario, marking a major retreat as the automaker posted its first operating loss since 1957. The project would have included four new plants, including an EV assembly factory and battery component facilities, creating 1,000 jobs at Honda's existing Alliston operation. The automaker cited "evolving business conditions, a change in external resource strategy and shifting customer demand" for the decision, which was first reported by Japan's Nikkei news agency. The EV assembly plant had been slated to open in 2028 with the capacity to produce 240,000 vehicles annually, and was to include joint ventures with POSCO Future M Co. Ltd. and Asahi Kasei Corp. The announcement came as Honda reported a net loss of 424 billion yen ($2.7 billion) for the fiscal year ending March 31, largely due to a massive write-down tied to its EV business. The company pointed to declining EV demand following the rollback of US environmental regulations and tax incentives, as well as mounting competition from Chinese producers. Prime Minister Mark Carney called the suspension "disappointing" but expressed optimism about the long-term growth of the EV market. Federal and Ontario governments had committed millions to the project, though Honda stated it had received no public funding for it. US policy changes have significantly impacted the auto industry, with a 25-per-cent tariff on non-US content of vehicles made in Canada adding substantial costs, and US EV sales falling 26 percent in the first quarter of 2026. The suspension reflects a broader retreat by major automakers from aggressive EV expansion plans. Sales of emissions-free vehicles in Canada declined 36 percent in 2025 to just 170,000 units, representing less than 9 percent of overall sales. Other automakers including Stellantis, Ford, and General Motors have taken billions in writedowns as they abandon or scale back EV production targets. Honda CEO Toshihiro Mibe indicated the company would refocus on hybrid and conventional combustion-engine models rather than betting solely on fully electric vehicles. The company emphasized it remains committed to Canada for the long term, having produced 400,000 vehicles at its Alliston plant in 2025. Industry-wide pressures have been amplified by geopolitical instability, rising energy costs, and supply chain disruptions stemming from international conflicts.