Japan’s Honda Motor Co. forecast a 59 per cent profit decrease in the current financial year and said it would put on hold a plan to build an EV supply chain in Canada, amid uncertainty stemming from U.S. President Donald Trump’s tariffs.
Honda’s forecast is the latest signal of the difficulty car makers are having navigating Trump’s tariffs on foreign-made automobiles at the same time the industry is being hit by the rise of Chinese EV producers.
Honda said it would put on hold for approximately two years a plan announced with great fanfare by Canadian politicians in April 2024 to build an EV supply chain in Alliston, Ont. The decision was taken due to the current slowdown in EV demand, it said.
“Due to the recent slowdown of the EV market, Honda Motor has announced an approximate two-year postponement of the comprehensive value chain investment project in Canada. The company will continue to evaluate the timing and project progression as market conditions change,” Honda Canada told CBC News in an email statement.
Honda also said the decision “has no impact” on current employment or production at the Alliston manufacturing facility.
Talks between Honda and Nissan to merge broke off earlier this year, although the two still have an agreement to co-operate on technology.
“Although the automotive industry is in a very difficult situation, we will definitely look for new directions of growth through strategic partnerships,” Toshihiro Mibe, Honda’s chief executive, told a news conference on Tuesday.