- The car manufacturer has blamed the delay on a slowdown in EV demand.
- Trump’s tariffs are also forcing Honda to start building the CR-V in the US.
- A battery plant and an EV plant with a 240,000 vehicle capacity were on the cards.
In April last year, Honda announced it would invest CA$15 billion ($10.77 billion) in a comprehensive electric vehicle supply chain in Canada to include an EV plant and a standalone battery facility in Ontario. However, the auto industry looks a lot different now than it did 12 months ago after Donald Trump’s return to the Oval Office, and Honda says it’s delaying its Canadian EV investments by “approximately” two years.
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In a letter sent to Honda shareholders, the automaker cited the current slowdown in EV demand as the reason for the delay in the plan. It added that it will keep a close eye on further market demands, but is not yet ready to confirm specific timing for the resumption of the project.
Read: Honda Pours $11 Billion To Build EVs In Canada’s Biggest Auto Investment Ever
Honda chief executive Toshihiro Mibe added during the marque’s quarterly earnings press conference that, “what happens after two years and the starting time of the project, we have to observe what is happening and ultimately make the decision.” Speaking with CTV News, Honda Canada spokesman Ken Chiu said there are no plans to cut production or local jobs.
Despite Honda saying the pause in the investments is due to a slowdown in EV demand, EV sales actually continue to rise in both Canada and the US. Last year, battery-electric vehicles made up 11.4% of all new car sales in Canada and 8.1% in the United States. Admittedly, demand hasn’t grown as quickly as many had expected, forcing several automakers to adjust their EV plans.
Honda’s CA$15 billion commitment was touted by former Prime Minister Justin Trudeau as the “largest auto investment in Canada’s history.” It was to include a battery plant with an annual capacity of 36 GWh while an EV assembly plant would have been able to build as many as 240,000 vehicles per year from 2028.
Beyond confirming a postponement of its Canadian plans, Honda says it will shift some production of the CR-V to its plant in Ohio in response to President Trump’s tariffs.
“There is room to increase the production capacity in the United States, and we are trying to look into what will happen as a result of that,” Toshihiro Mibe added. “In the midterm, if the tariff measures are to be in place for a long time, then we will have to increase our production capacity in the United States.”
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