Photo/Illutration Toshihiro Mibe, president of Honda Motor Co., and then-Canadian Prime Minister Justin Trudeau in Alliston, Canada, on April 25, 2024 (Asahi Shimbun file photo)

Honda Motor Co. is finalizing plans to indefinitely suspend construction of electric vehicle and battery factories in Canada after changes in U.S. policy cooled demand in the North American market.

The company in April 2024 announced it would build the EV and battery plants in the Canadian province of Ontario and aimed to start operations in 2028.

However, EV demand in the United States, the primary export destination, has not expanded as expected. A big blow came when the U.S. Trump administration eliminated tax credits for EV purchases.

Honda announced in May 2025 that it would delay the start of operations for the EV plant by about two years. And it has since been further reviewing the EV and battery plant plans.

The EV plant was expected to have a maximum annual production capacity of 240,000 vehicles.

Honda planned to invest an estimated C$15 billion (about 1.7 trillion yen) in the plant, making it one of the largest investments in the company’s history.

The plan included financial support from the Canadian federal government and the Ontario provincial government.

Honda has also been upgrading its plant in the U.S. state of Ohio to enable EV production. The Canadian facility was expected to become its second EV plant in North America.

Honda may now need to overhaul its EV strategy.

In March 2026, it announced it had canceled development of three EV models, including the flagship model of its new Zero series.

The company expects EV-related losses to reach up to 2.5 trillion yen by the fiscal year ending March 2027.

Honda currently plans to focus on hybrid vehicles while continuing to reassess its overall business strategy.

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