The wheels are starting to come off Canada’s $57 billion EV bet.
What happened: Reeling from the one-two punch of slow EV demand and trade turmoil, Honda — the second-largest automaker in Canada — is slamming the brakes on its $15 billion electric vehicle (EV) project in Ontario for at least two years.
- Honda said the decision was based on sluggish EV sales, but given that it expects to take a roughly $4.2 billion hit from U.S. tariffs this year, it’s hard to imagine that the Trump factor wasn’t at play.
Catch-up: Touted as one of the largest foreign investments by a single company in Canadian history, Honda’s project was the cornerstone of Canada’s EV manufacturing push, with Ottawa and Ontario each pledging up to $2.5 billion in incentives.
Zoom out: The Honda plant isn’t the first government-backed EV venture to sour. In March, Québec confirmed that the $270 million it had already invested in a Northvolt factory was “lost” after the Swedish battery giant filed for bankruptcy.
- A $2.7 billion Umicore battery plant in Kingston, Ontario, is indefinitely paused, while Ford recently delayed plans to begin EV manufacturing at its plant in Oakville, Ontario. Both projects were promised hundreds of millions in government subsidies.
Why it matters: Canada’s auto sector is already facing tariff-induced layoffs and temporary plant closures. Honda’s announcement is a sign of deeper trouble, not just for Ottawa’s EV ambitions, but for the country’s entire auto industry.—LA