Honda Canada says it is pausing its planned $15-billion electric vehicle expansion project in Alliston indefinitely, citing slowing EV demand and changing global market conditions.
The announcement follows reports that Honda posted a $2.7-billion full-year loss, which the company attributes largely to the costs associated with electric vehicle development as demand shifts toward hybrid vehicles.
Speaking at a news conference in Tokyo, Toshihiro Mibe said the company is adjusting its strategy and will focus more heavily on hybrid production rather than fully electric vehicles.
The paused project, first announced in 2024, included plans for a new EV assembly plant and battery supply chain in Alliston and was expected to create approximately 1,000 manufacturing jobs in the region.
Despite the decision, Honda says existing operations at its Alliston manufacturing facility will continue without interruption and no current jobs are being affected. The plant continues to produce strong volumes of the Honda Civic and CR-V, with more than 60 per cent of Canadian production now consisting of hybrid models.
New Tecumseth Mayor Richard Norcross issued a statement this week regarding the situation.
“We are aware of Honda’s decision to halt production plans for the EV facility in Alliston. While this is disappointing news, it is a clear signal that now, more than ever, New Tecumseth—and Canada—must act.
“We want to be clear: the decision to pause this project does not impact current operations or existing jobs in New Tecumseth. Our local workforce remains strong, and our manufacturing base remains resilient.
“However, the federal government must take a hard look at the policies, incentives, and infrastructure required to support Canadian-made vehicles and secure long-term investment. Our competitiveness is being tested in real time, and the response must be decisive and immediate.
“Through our Council and the Simcoe Area Auto Mayors, we are actively pushing for coordinated action and stronger alignment with industry needs. This includes continued advocacy, collaboration, and engagement—both domestically and internationally—to reinforce relationships and demonstrate that our region remains ready, capable, and competitive.
“New Tecumseth has long been a proud manufacturing community, and we will continue to stand behind that legacy. We will work directly with Honda and all our manufacturing partners to protect local jobs, sustain our economic base, and ensure opportunities like this are not lost—but brought back stronger.
“We are ready to do our part. The federal government must do theirs. We need action—now.
“On May 21, the Town of New Tecumseth, alongside the Simcoe Auto Mayors, will come together at Town Hall to jointly call on the federal government for targeted amendments to federal automotive policies. At that time, we will also be unveiling a new initiative aimed at supporting and strengthening Canada’s automotive strategy.”
Honda says it plans to spend the next several years restructuring its automotive business and intends to launch 15 next-generation hybrid models globally by 2030, while continuing development work on future EV technology.
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