Honda has assured Canada that no jobs will be lost and it is committed to major electric vehicle investments in the country, Industry Minister Melanie Joly said on Wednesday, in the wake of the Japanese carmaker announcing it would put on hold a plan to build an EV supply chain in Canada.

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Honda said its plan to build an EV supply chain in Alliston, Ont. — which was first announced in April 2024 — would be paused for about two years, due to uncertainty caused by tariffs.

Slower market demand, tariffs and evolving production strategies cited as some of the reasons why Honda is pausing its Canadian EV plans

Honda's forecast is the latest signal of the difficulty car makers are having navigating tariffs alongside the rise of Chinese EV producers.

Ontario Premier Ford is vowing to hold auto companies that pull out from Ontario "accountable" after news that Honda announced it is putting a major electric vehicle supply chain planned for the province on hold.

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Research from Canada's parliamentary budget watchdog indicates that manufacturers, between 2020 and 2024, unveiled plans to invest roughly $33 billion in EV and related supply-chain production. The Canadian government pledged $22 billion in financing and tax breaks to lure those companies.

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Honda said on Tuesday it would postpone by at least two years its large-scale investments to establish an electric vehicle supply chain in Canada. Originally announced in April of last year , the project is valued at $15 billion,

Research from Canada's parliamentary budget watchdog indicates that manufacturers, between 2020 and 2024, unveiled plans to invest roughly $33 billion in EV and related supply-chain production. The Canadian government pledged $22 billion in financing and tax breaks to lure those companies.

Honda’s CA$15 billion commitment was touted by former Prime Minister Justin Trudeau as the “largest auto investment in Canada’s history.” It was to include a battery plant with an annual capacity of 36 GWh while an EV assembly plant would have been able to build as many as 240,000 vehicles per year from 2028.