Japan’s auto giant Honda Motor Co. has announced a two-year delay in its ambitious plan to establish a comprehensive electric vehicle (EV) supply chain in Canada, citing the global slowdown in EV demand. The decision was confirmed by Honda Canada, which shared the update with local media on Tuesday.
“Due to the recent slowdown of the EV market, Honda has announced an approximate two-year postponement of the comprehensive value chain investment project in Canada,” the company said in a statement to CBC News. Honda emphasized that the decision is temporary and will be revisited as market conditions evolve. The company will continue to monitor trends in the EV segment and adjust the project timeline accordingly.
Importantly, Honda clarified that the delay will not affect current employment or production operations at its existing manufacturing facility in Alliston, Ontario. The reassurance comes as a relief to the local workforce and stakeholders who had been anticipating changes due to the original investment plan.
Originally unveiled in April 2024, the project involved the creation of a full EV production and supply ecosystem in Alliston. The plan included major upgrades to the existing vehicle assembly plant, the construction of a new EV battery plant, and two dedicated facilities to manufacture essential battery components. Once completed, the facility was expected to produce up to 240,000 electric vehicles annually by 2028.
The announcement had marked a significant milestone for Honda as part of its long-term vision to accelerate electrification and reduce carbon emissions. The Canadian government had also expressed strong support for the investment, recognizing its potential to position Canada as a hub for EV manufacturing.
While the delay is seen as a strategic move in response to softening global demand, analysts suggest that Honda remains committed to its EV roadmap. The company has been steadily increasing its investments in EV technology and infrastructure globally, and the Canadian project is still considered central to its North American EV strategy.
Honda is expected to provide updated timelines and further guidance once EV market dynamics begin to stabilize.