Honda has reportedly decided to indefinitely suspend its planned multi-billion-dollar electric vehicle investment project in Canada as uncertainty grows around the North American EV market and changing US government policies.
According to a report by Nikkei Asia, Honda has also entered discussions with the Canadian government regarding the future of the planned manufacturing and battery production facilities in Ontario.
The automaker had already announced in May 2025 that it would delay construction of the project by around two years. At the time, Honda pushed the planned start of operations from 2028 to at least 2030.
However, Nikkei Asia reported that Honda is now considering a complete withdrawal from the project depending on future developments in the North American electric vehicle market.
“Seeing market conditions as unlikely to improve in the short term, Honda decided to indefinitely suspend the project, and has entered talks with the Canadian government,” Nikkei Asia reported.
Honda unveiled the project in 2024 as part of a broader electrification strategy for North America. The plan included an investment of 15 billion Canadian dollars ($9.3 billion) in an electric vehicle assembly plant with annual production capacity of 240,000 vehicles, along with a battery factory intended to supply the facility.
The company aimed to use the Canadian operation to produce electric vehicles for the North American market, particularly the United States, while benefiting from incentives available under the US Inflation Reduction Act and financial support offered by the Canadian government.
Ottawa has been seeking to establish a domestic electric vehicle and battery supply chain using Canada’s raw material resources, attracting several automakers and battery manufacturers to the country in recent years.
Honda had already secured land for the project and obtained government funding commitments before reconsidering the investment.
The automaker’s decision comes amid significant changes to US electric vehicle policy under President Donald Trump, whose administration reversed several EV initiatives introduced under former President Joe Biden.
According to the report, the expiration of EV incentives and broader policy changes contributed to weakening electric vehicle demand in the United States following an earlier sales surge before subsidies ended.
Honda has also recently scaled back several EV-related programmes tied to the North American market.
The company’s Acura ZDX electric SUV, developed in cooperation with General Motors, is reportedly no longer in production, while the Honda Prologue is also expected to be discontinued later this year.
Additionally, the joint venture Sony Honda Mobility has reportedly been wound down, and the planned launch of its Afeela electric vehicle will no longer proceed.
Honda’s planned “0 Series” battery-electric vehicles for North America have also reportedly been suspended.
Although Honda’s manufacturing facility in Ohio remains capable of producing battery-electric, hybrid and combustion-engine vehicles on shared production lines, the company is expected to prioritise hybrid and petrol-powered models in the near term.
