Honda blames tariffs, but also the slower-than-expected EV adoption.
Some car production will be moved from Canada to the US.
The announcement earlier this week of a truce between China and the United States certainly had positive effects on financial markets, but that doesn’t mean the automotive industry is out of the woods yet.
Japanese automaker Honda is particularly affected by the trade tariffs imposed by the Trump administration. The Japanese auto giant is forecasting losses of $4.34 billion in 2025, a 59% drop. Operating profit is expected to fall from $8.08 billion to $3.34 billion, while net income is projected to decrease by 70%. Ultimately, the operating margin is set to melt away, from 5.6% down to 2.5%.
This is a very grim announcement for Honda, which had already planned major investments in Canada. Sadly, that project has now been pushed back.
The bad news — for Canada’s automotive industry — was confirmed by Honda CEO Toshihiro Mibe, who said the delay would be at least two years. In addition to tariffs, Mibe also blamed the slower-than-expected adoption of electric vehicles, a trend observed over the past few months.
The plan to build an EV production complex in Alliston, Ontario, is therefore on hold as of now. Meanwhile, production of CR-Vs intended for the U.S. market could of been shifted to U.S. factories. However, the assembly of Civics and CR-Vs at the Ontario plant will continue for the Canadian market.
Earlier in April, Honda had also announced that production of the hybrid Civic would be moved from Japan to its plant in Indiana, in the U.S. — a straightforward way to avoid American tariffs.
On this note, we must add a comment received from Honda Canada :
“In response to changes in the external environment, Honda is flexibly adjusting its CR-V production across North America.
A portion of CR-V production (CR-V for the US market) will be transferred from Honda of Canada Mfg. (HCM) to the East Liberty Plant (ELP) in Ohio, which has also been producing CR-Vs. At the same time, approximately the same number of CR-V units intended for markets outside the U.S. will be shifted from ELP to HCM.
This adjustment leverages the flexible manufacturing capabilities of our three North American CR-V production facilities to better align with customer needs and market conditions. HCM, which has been building the CR-V since 2011, will continue to produce the model as part of this realignment.
Importantly, this change will not impact HCM’s overall production volume or employment. Canada will continue to play a vital role in Honda’s North American operations.”
