It's ironic that Honda is officially putting its $15 billion electric vehicle (EV) and battery plant in Alliston, Ontario on indefinite hold now, just as demand for EVs in Canada (and around the world) is starting to pick up again.
Honda paused development last May, at a time when EV demand was indeed reeling. Since then, though, the US war in Iran and the ensuing oil price shock, along with Canada's reinstatement of a $5,000 rebate, has made EVs much more palatable and demand for zero emission vehicles (ZEVs) is recovering, big-time. In March 2026, sales of ZEVs in Canada increased by 75% over the previous year. Where EVs made up just 6.6% of new vehicles a year ago, in March 2026 they made up 12.2%, almost double. And gas prices have continued going up and up since March as the US war in Iran continues, so the expectation is that EV demand will continue to rise.
And this is the time that Honda drops its bombshell about cancelling its new investment in the Alliston plant?
A big part of the problem is that the market for EVs in the USA is still soft, and most of the cars that would be made in Ontario would be destined for the US, not Canada. But, even in America, EV demand is picking up, as the Iran war and the blockage in the Strait of Hormuz, drags on with no end in sight.
So, is Honda being short-sighted here? Well, longer-term trends are almost impossible to predict in this rapidly changing world, and Honda is notoriously conservative. It's hard to commit $15 billion without a pretty firm guarantee of future sales demand, I get that. But taking risks and getting ahead of the competition is what corporate capitalism is all about, no?
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