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Ontario  + Canada + Cross Border News  + Industrial  | 
Aerial photo of Honda Canada manufacturing plant in Aliston, Ont.

EV Makers Push On with Plant Projects Amid Uncertainty

Global electric-vehicle makers are pressing forward with Canadian multi-billion-dollar manufacturing-plant projects despite uncertainty surrounding U.S. President Donald Trump’s looming tariffs threat, Canada’s National Observer reports.

The Canadian EV sector received a temporary reprieve after Trump held off on imposing sweeping 25% tariffs on imports from Canada, including automobiles, for at least 30 days. However, the future remains uncertain for companies navigating the EV manufacturing landscape as the tariffs threat continues despite the pause and global demand changes.

Since 2021, international automakers and battery manufacturers have committed $46.1 billion in investments, primarily in Ontario and Quebec, with an additional $52.5 billion in public subsidies and incentives from federal and provincial governments, according to the National Observer. Despite potential economic headwinds, industry leaders say they remain committed to long-term growth in Canada’s auto sector.

“We are taking no immediate actions related to either our current manufacturing operations or electrification-production plans in Canada,” Ken Chiu, a Honda Canada spokesman, told the National Observer.

Honda Canada is investing $15 billion in four plants, including an EV facility in Alliston, Ont.

Chiu reaffirmed Honda’s commitment to achieving carbon neutrality by 2050 and transitioning to 100% EV sales by 2040.

“We will continue to take a measured approach by utilizing our portfolio of [internal combustion engines], hybrids and EVs as we navigate the transition towards electrification,” he told the National Observer.

According to Chiu, Honda Canada’s EV strategy enables the company to adjust to short-term disruptions.

“Our path is for the long term, and with our flexibility in producing powertrains in North America, we can pivot accordingly,” he told the National Observer.

Meanwhile, Volkswagen’s battery subsidiary, PowerCo, is also moving ahead with its $7-billion gigafactory in St. Thomas, Ont., which is set to produce battery cells for up to one million vehicles annually starting in 2027.

“We are focused on our mission to ramp up the gigafactory and deliver a project with the right engineering and the right supply chain partners,” Tegan Versolatto, a PowerCo spokeswoman, told the National Observer.

Versolatto added that infrastructure developments, including a rail spur line and power substation, are already in progress. The company currently has about 100 employees on site and is actively hiring for various roles, the National Observer reported.

The tariff uncertainty has raised concerns among industry analysts, who warn that the evolving trade policies could have widespread effects.

“One thing that’s clear is that this introduces a lot more uncertainty at an early stage for the EV sector,” Jeff Turner, director of clean mobility at market research firm Dunsky, told the National Observer.

He added that while existing vehicle assembly plants may face temporary disruptions, the bigger risk lies in whether future investments in new factories are reconsidered or redirected elsewhere.

Canada’s entire auto industry is bracing for potential tariff repercussions, contending that plants on both sides of the border could shut down within a week.

“It could be a week, it could be two weeks,” Linda Hasenfratz, executive chairwoman of parts manufacturer Linamar, told CNBC. “The industry tends to run on low levels of inventory so I imagine it will be quite soon.”

Linamar operates 75 manufacturing locations.

“Nobody can absorb this kind of cost, not the automakers, not the suppliers, not consumers,” Hasenfratz wrote in a letter to the New York Times. “Demand will collapse, and vehicle production will grind to a halt, putting millions of workers out of work, the vast majority of which are in the US.”

Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, has emphasized the urgency of the situation.

“You can’t make a car without all the parts,” Volpe told CBC. “Nobody in the U.S. will be making cars.”

Pictured: Existing Honda Canada plant in Aliston, Ont., where a new EV production facility will be located.

Photo: Honda Canada

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Inside The Story

Ken ChiuLinda Hasenfratz

About Monte Stewart

Monte Stewart serves as Content Director - Canada for Connect Commercial Real Estate. Based in Vancouver, British Columbia, Monte provides daily news coverage of major Canadian commercial real estate markets, including Vancouver, Toronto, Montreal and Calgary. He has written about the real estate sector for various media outlets and Avison Young since the early 2000s. In addition, he has covered sports, general news and business for several leading wire services and publications, including The Canadian Press, The Associated Press, The Calgary Herald, The Globe and Mail, Research Money, The Daily Oil Bulletin, Natural Gas World and The Toronto Star. Monte is active in his community as a youth basketball coach and raises funds for such charitable causes as Movember.

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