Honda Motor Co. is halting plans to build a $15-billion electric vehicle plant in Canada due to declining interest in EVs, according to a report from Nikkei. The automaker is responding to waning EV demand in the U.S. and will instead prioritize hybrids in its North American strategy.
Plant Details and Pause
The facility, planned near Alliston, Ontario, was intended to produce 240,000 EVs annually starting in 2028. However, Honda paused construction in May 2025 for two years due to the EV slowdown. Now, the project appears to be canceled entirely.
Market Context
New EV sales in the U.S. dropped 27% in the first quarter of 2026, partly due to the cancellation of the $7,500 federal tax credit. In Canada, zero-emission vehicle registrations accounted for 11.2% of market share in Q4 2025, up from 9.7% the previous quarter.
Honda Canada and Ontario Premier Doug Ford were not immediately available for comment. The shift underscores the challenges automakers face as EV demand fluctuates amid changing policies and consumer preferences.
