Honda Pauses Canadian EV Expansion Due To Tariffs

The $10.7 billion expansion in Ontario is on hold for two years. Honda cites slipping demand and reduced profit due to U.S. tariffs on Canada.

Photo by: Honda

Kevin Williams

By: Kevin Williams

May 14, 2025 at 4:22pm ET

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Honda is postponing its $10.7 billion expansion in Ontario to make EVs and EV components for two years.
The brand cites reduced profits from U.S. tariffs and softer-than-expected demand for EVs in the U.S. and Canada.
Originally, Honda's new Canadian facilities were supposed to produce up to 240,000 vehicles per year when it went live in 2028.

The U.S. versus the world tariffs are continuing to have their effects. Just yesterday, we got another EV-related casualty—Honda’s Canadian EV expansion plans. The brand is citing reduced profit directly related to the tariffs, and thus, it is postponing plans for expansion at this time. It is also moving some CR-V production back to the U.S. to mitigate the effects.

This $10.7 billion investment would have included the retooling of an existing manufacturing plant, as well as several battery and cell manufacturing plants to support Honda’s EV future. This sort of served as the Canadian sister to the Ohio EV hub, producing parts to support the forthcoming 0 Series models.

Now, that’s all up in the air. The plan is on pause for the next two years, which also hits the pause button for 1,000 new Canadian jobs related to the expansion. Honda says the decision won’t hurt any current jobs at Honda’s existing Canadian manufacturing plants, however.

Honda will “continue to evaluate the timing and project progression as market conditions change.” Recent reporting sees that Ontario politicians are attempting to ensure that this is simply a postponement, and not a full cancellation of Honda’s investments in Canada.

Photo by: Honda

This is a very tense geopolitical moment for U.S.-Canada relations. With President Trump's moves on tariffs between the previously tariff-free borders, the political relationship between the two countries has soured greatly. Scaling back jobs due to a softer EV market may be one thing, but Honda is adamant that its current decision is at least partly due to the tariffs the U.S. has on Canada.

Honda says that if these tariffs continue, it will likely have to rejigger its operations to move more production out of Canada to make sure the brand stays afloat. Could that mean fewer jobs at Honda Canada? As of right now, the automaker says no.

What do you think?

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Hopefully, this slowdown won’t hurt the brand's U.S. plans too badly, but we’ll just have to wait and see.

Contact the author: Kevin.Williams@InsideEVs.com