Honda Canada has indefinitely suspended its planned $15-billion EV manufacturing plant project in Alliston, Ont., citing evolving business conditions, changes in external resource strategy and shifting customer demand.

The move comes after Honda Canada postponed the project in 2025 for two years as part of a global EV strategy shift stemming from U.S. and European government decisions to relax environmental regulations that had sparked widespread EV adoption. EV sales in Canada and the U.S. have declined considerably over the past two years.

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

The automaker said the decision will not affect employment or production at its existing manufacturing facility in Alliston, Ont., where it continues to build Honda Civic and CR-V models to meet market demand. Honda said its flexible manufacturing approach and long-term commitment to Canadian production remain unchanged.

The proposed EV project had the potential to create 1,000 additional manufacturing jobs in Alliston. Honda noted that while the project had received future funding commitments from the federal and Ontario governments, no public funds had been transferred to the company.

Honda said it will continue reviewing future procurement and business strategies while monitoring market conditions.

South Korea’s Posco Future M and Japan’s Asahi Kasei were slated to develop EV-battery materials plant tied to the Honda Canada plant. Asahi Kasei has postponed its planned $1.7-billion facility in Colborne, Ont., until 2029 or later, according to a Nikkei report. Nikkei had reported that Honda Canada would postpone the Alliston plant indefinitely before the company announced the move.

In 2025, Honda built approximately 400,000 vehicles in Canada, including about 198,000 Civic units and 202,000 CR-V units. The company said all Civic sedans and CR-Vs sold in Canada are manufactured domestically, with more than 60 per cent of the vehicles produced last year being hybrids.

Honda has maintained manufacturing operations in Canada since 1986. The company said its strategy of building vehicles where they are sold has helped it navigate changing market conditions while supporting continued production in Canada.

Pictured: Honda vehicle manufacturing plant in Alliston, Ont.

Photo: Honda