Honda Motor is reportedly set to cancel the development of its $15 billion electric vehicle complex in Canada, as indicated by reports from Japanese media sources. The automaker had put the Alliston, Ont., project on hold in May last year, with plans to reassess the EV market’s trajectory in two years before making a final decision. The decision to pause the Canadian EV investment comes in light of sluggish demand for EVs in the United States, leading Honda to shift focus towards making hybrids the centerpiece of its North American strategy.

While Honda Canada has not officially confirmed these reports, provincial and federal officials have mentioned ongoing communication with the automaker, without explicitly mentioning any decision being made. The project, announced in 2024, was expected to feature a vehicle assembly plant and battery production facilities, with substantial financial support from federal and provincial sources.

Ontario Economic Development Minister Vic Fedeli emphasized that public funding for Honda would only proceed if the project moved forward. He expressed confidence in Honda’s commitment to Canada despite acknowledging challenges in the auto industry. Prime Minister Mark Carney acknowledged the industry’s challenges, particularly related to U.S. tariffs, without directly addressing Honda’s situation.

The decision to halt the development of the EV complex is part of a trend where various EV projects in Canada have faced setbacks. Major shifts in U.S. policies, including changes to fuel efficiency standards and EV incentives, have impacted the adoption of zero-emission vehicles. Canada’s auto strategy, introduced in February, aims to leverage electrification in the automotive industry while supporting existing facilities.

This development follows General Motors’ discontinuation of the BrightDrop electric van production, Ford’s shift from EVs to pickup trucks in Oakville, and the shelving of several battery-related projects. Conservative MP Adam Chambers criticized the Liberal government’s EV policy, calling for a reevaluation to secure access to the U.S. vehicle market to sustain the Canadian auto industry. Honda’s production in Canada last year exceeded 400,000 vehicles, with a focus on gas and hybrid versions of popular models like Civic and CR-V.