Honda’s first ever full year loss came stamped with a US$2.7 billion price tag and a clear message: the company’s electric vehicle ambitions have outrun the market’s appetite to absorb them.
That reckoning landed hardest in Ontario, where Honda’s $15-billion EV manufacturing complex has now been suspended indefinitely. The project, first announced in 2024, was supposed to begin producing up to 240,000 vehicles annually by 2028 and was once billed as Canada’s first comprehensive electric vehicle supply chain.
Global CEO Toshihiro Mibe laid out the rationale in Tokyo on Thursday. Capital earmarked for EV expansion will be redirected toward hybrid models over the next three years, part of a structural rebuild of the automaker’s business. Hybrids, he noted, are what consumers are actually buying.
The decision is less a surprise than the formalization of one. Honda already pushed the project back two years in May 2025, and Nikkei Asia reported the indefinite halt last week. Roughly 1,000 direct jobs and up to $5 billion in combined federal and provincial support were tied to the build. None of that public money has been distributed.
The broader context begins in Washington, where the Trump administration has scrapped EV tax credits and rolled back emissions standards, knocking the economic case for battery-only production sideways almost overnight. Finance Minister François-Philippe Champagne has framed the resulting slowdown as a global “hold” rather than a uniquely Canadian problem.
Prime Minister Mark Carney’s government recently scrapped the mandate requiring all new car sales to be electric by 2035, replacing it with revised emissions standards and a new EV rebate program. Ottawa was already adjusting to the same signals Honda just acted on.
Whether “indefinitely” becomes “permanently” depends on two variables outside Honda’s control: consumer demand returning, and U.S. policy stabilizing long enough for a 15-billion-dollar bet to pencil out again.
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