Honda Canada has hit the brakes on its plan to build a $15-billion electric vehicle plant in Alliston, Ont.

The Japanese carmaker confirmed the development in a statement Thursday after reports surfaced last week the automaking giant was halting its plans to construct the facility.

The decision to halt the project does not impact current employment or production levels at its Alliston operation, Honda said.

“Honda announced an indefinite suspension of the Canadian value chain investment project in response to evolving business conditions, a change in external resource strategy and shifting customer demand,” its statement reads.

“Based on our revised strategic objectives, we have determined that an indefinite suspension of the value chain project is appropriate at this stage. We will continue reviewing our future procurement and business strategies, while carefully monitoring market conditions.”

The office of Industry Minister Melanie Joly said last week it was in “regular contact” with Honda regarding the plant.

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“American tariffs and changes to U.S. domestic policies are creating real pressures for automakers, prompting some to delay or scale back investments in electric vehicle and battery projects,” a spokesperson for Joly’s office said in an emailed statement; however, they did not clarify whether Honda had communicated any plans to scale back to Ottawa.

“We remain in regular contact with Honda and will continue to put Canadians’ interest first.”

The new EV plant had the potential to create 1,000 jobs, on top of the 4,200 in Alliston; the project was announced in 2024 and production was slated to begin by 2028.

However, the project was delayed, with Honda announcing a two-year pause in 2025. At the time, Honda attributed the delay to the “slowdown of the EV market.”

Under the original plan, the plant was set to produce up to 240,000 vehicles per year when fully operational in 2028.

Two years ago, the plant was one of a series of electric vehicle-related jobs announced by then-prime minister Justin Trudeau and Ontario Premier Doug Ford. The projects were supported through tax credits and direct support from both levels of government.

Ottawa was set to give the Japanese automaker around $2.5 billion through tax credits, while Ontario committed to providing up to $2.5 billion in support directly and indirectly.

— with files from Isaac Callan, Colin D’Mello and Uday Rana

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