Honda reveals delay of $15-billion Canada investment part of shift in EV strategy
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Honda Motor Co., Ltd on Tuesday released new details explaining why it is delaying its planned $15 billion investment in a battery and electric vehicle complex in Ontario by around two years.
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In its 2025 Business Briefing, an annual report outlining its strategy, chief executive Toshihiro Mibe said that Honda was reducing its planned global investment in EVs by 30 per cent — to $67.5 billion (7 trillion yen) from $96.4 billion (10 trillion yen) — over the next roughly half-decade because EV adoption has fallen behind the company's initial projections.
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As a corollary shift in strategy, the company plans to instead increase its production of hybrid-electric vehicles, a technology that allows consumers the comforts of both internal combustion engines and battery-electric vehicles.
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'We are reassessing our EV strategy and road map, including the plans for the product lineup and the timing of relevant investments, including the one to build a comprehensive EV value chain in Canada,' Mibe said according to a transcript of his speech accompanying the Business Briefing.
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The company said last week that the two-year delay to its planned EV project in Canada is not a prelude to a cancellation.
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The project was announced in April 2024 with an original timeline to begin production by 2028, and included an EV assembly plant, as well as battery-cell manufacturing and active cathode material plants. A battery recycling operation was also a possibility.
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The overall project was expected to have eventual production capacity of 240,000 EVs per year, and had attracted federal and provincial government support, such as tax credits, that were expected to defray $5 billion of direct and indirect costs.
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Mibe said Tuesday that the project in Alliston, Ont. — where Honda has produced vehicles since 1986 — is still key to Honda's electrification plans.
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'One of our goals with this project is to take batteries in-house, as the core of electrification technology,' he said.
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But Mibe added that electrification cannot be Honda's responsibility alone, and must be done in collaboration with other companies and governments of various countries.
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He added that 'environmental regulations, which had been the premise of widespread adoption of EVs' are being relaxed in both the U.S. and Europe.
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In the U.S., long the export destination for the majority of Honda vehicles produced in Canada, President Donald Trump has said he wants to roll back the electric vehicle transition by cancelling legislation that provided incentives for companies to build EV supply chains in that country, as well as consumer incentives that offset the cost of purchasing EVs.
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