Honda Motor Co. has decided to halt its plans for a $15-billion electric vehicle (EV) plant in Ontario, Canada, due to declining interest in electric vehicles, according to a report from the Asian business news outlet Nikkei. The automaker is responding to waning EV demand in the United States by abandoning the project and instead intends to place hybrids at the center of its North American strategy.
Project Details and Pause
The plant, originally planned for construction near Alliston, Ontario, was expected to produce 240,000 EVs annually starting in 2028. However, Honda had already paused construction on the facility in May 2025 for a two-year period due to the slowdown in the EV market. The latest report indicates a complete halt of the project.
Market Conditions
New EV sales in the United States plummeted by 27 percent in the first quarter of 2026, partly due to the cancellation of the $7,500 federal tax credit for EVs. In Canada, new zero-emission vehicle registrations accounted for 11.2 percent of the market share in the fourth quarter of 2025, up from 9.7 percent in the previous quarter, showing a slight increase despite the broader slowdown.
Company and Government Response
Honda Canada stated that it had nothing to report at this time. Ontario Premier Doug Ford was not immediately available for comment. The decision marks a significant shift in Honda's North American strategy, emphasizing hybrid vehicles over fully electric models in response to changing consumer demand.
