Honda blames slowing EV market for delaying $15 billion expansion in Alliston, DCs vanish
Posted May 13, 2025
The electric vehicle era at Honda of Canada Manufacturing (HCM) will have to wait at least two years as the Japanese based automaker made public this morning construction will cease on its $15 billion electrification and new battery plant in Alliston citing unfavourable market conditions.
The "postponement" reportedly also caught HCM's associates by surprise learning the news from published reports earlier this morning.
Just over a year ago last April, Honda, along with the federal and provincial government, announced the largest automotive investment in Canadian history to take HCM fully into the EV market. But since the election of Donald Trump as American president, his administration has eliminated or watered down most EV incentives in the U.S. and more recently, implemented a series of auto tariffs ranging from 10 per cent to 25 per cent on imports.
During this period of market instability, Honda has refuted several reports out of Japan that included shifting current production out of Alliston to the U.S. plants to avoid tariffs.
"Currently, there is no impact to other North American manufacturing facilities. We continue to prepare for the start of flexible production at the EV Hub in Ohio," said Ken Chiu, Corporate Communications, Honda Canada.
"The company will continue to evaluate the timing and project progression as market conditions change. This decision has no impact on current employment levels or production at the Honda manufacturing facility in Alliston."
In addition to the direct impacts on the construction jobs, and the 1,000 new positions the new plants were going to generate, New Tecumseth will have to wait to collect more than $100 million in negotiated development charges (DCs) that would have flowed as building permits were pulled, along with planning fees. That could all change if plans in two years are scaled back. Another impact is the purchaser of the former Town administration centre whose plan is/was to turn the facility into professional offices tailored for personnel working on the Honda project.
New Tecumseth Mayor Richard Norcross released a statement recognizing Honda's tenure here for over 40 years and pleased they reiterated their commitment to its operations in Alliston.
"While we are disappointed by the delay in the project, we remain optimistic that the transition to electric vehicles will reinvigorate this important initiative in the near future," said Norcross. "The Town of New Tecumseth stands ready to work collaboratively with Honda, as well as our partners in the Provincial and Federal governments, to support and advance this significant investment when the time is right."
