On April 15, 2025, a report from Japan’s Nikkei newspaper sparked concern by claiming Honda Motor Co. was planning to shift production of its CR-V and Civic models from Canadá to the Estados Unidos to dodge new U.S. tariffs. Canadian officials swiftly debunked the claim, with Ontario Premier Doug Ford and Federal Industry Minister Anita Anand asserting that no such plans exist. This development unfolds against the backdrop of a $15 billion CAD ($11 billion USD) investment by Honda to build a comprehensive electric vehicle (EV) supply chain in Ontario, raising questions about the resilience of Canada’s auto sector amid escalating trade tensions.

Canadian Officials Refute Production Shift Claims

The Nikkei report suggested Honda aimed to increase U.S.-built vehicles to 90% of its American sales, up from about 70%, by relocating some CR-V and Civic production from its Alliston, Ontario, facility. Ontario Premier Doug Ford, in a press statement, called the report “not accurate at all,” noting he had spoken directly with Honda Canada’s president, who confirmed the company’s commitment to maintaining full production in Canada.

Federal Industry Minister Anita Anand echoed this in a social media post, stating, “I am in close contact with the company, and Honda has communicated that no such production decisions affecting Canadian operations have been made, and are not being considered at this time.”

Honda’s Alliston plant, operational since 1986, employs 4,200 workers and produced approximately 375,000 vehicles in 2023, including the Civic sedan and CR-V SUV. Ford’s office emphasized that Honda assured the province that the facility will continue operating at full capacity with no job losses anticipated. Anand planned to meet with Honda Canada’s CEO on April 15 to seek further clarity, though Honda itself had not issued a direct response to media inquiries by the time of publication.

U.S. Tariffs Disrupt North American Auto Integration

The speculation about production shifts stems from U.S. President Donald Trump’s imposition of a 25% tariff on all imported vehicles, including those from Canada, effective April 3, 2025. This policy, which overrides provisions of the Canada-U.S.-México Agreement (CUSMA), has strained the deeply integrated North American auto industry. Prime Minister Mark Carney, speaking at a campaign stop, criticized the tariffs as an attempt to “pull apart” this integration, warning of short-term impacts like layoffs and potential production adjustments.

The U.S. tariffs have already prompted countermeasures. Canada introduced retaliatory tariffs on April 9, targeting U.S.-made vehicles not compliant with CUSMA and non-Canadian content in compliant vehicles. To mitigate the impact, the Canadian government announced on April 15 that automakers maintaining production levels in Canada could import a limited number of U.S.-assembled vehicles tariff-free. This move aims to stabilize the sector, which supports hundreds of thousands of jobs and contributes significantly to Canada’s GDP.

Honda’s Electrified Lineup and Canadian Operations

Honda’s Canadian operations are critical to its North American strategy, particularly for its electrified vehicles. The Alliston plant produces the gas-powered Civic sedan and CR-V SUV, while hybrid variants like the CR-V Hybrid and Civic Hybrid are also part of Honda’s portfolio. The company’s first all-electric offering, the Honda Prologue, a battery-electric SUV, is manufactured in North America, though not in Canada. Honda also plans to introduce the Acura ZDX, a luxury electric SUV, and is developing its 0 Series EVs, unveiled as prototypes at CES 2025.

In April 2024, Honda committed $15 billion CAD ($11 billion USD) to establish a comprehensive EV supply chain in Ontario, including a new EV assembly plant and a battery-cell manufacturing facility in Alliston. The project, backed by up to $5 billion CAD ($3.6 billion USD) in public funds, aims to produce 240,000 EVs and 36 gigawatt-hours of batteries annually by 2028. This investment underscores Honda’s goal to make battery-electric vehicles (BEVs) and fuel-cell electric vehicles (FCEVs) 100% of its global sales by 2040.

Tariffs Threaten EV Ambitions

The U.S. tariffs pose a broader challenge to the EV industry, where supply chains crisscross borders. Canada has positioned itself as a hub for EV production, attracting multi-billion-dollar investments from Honda, Stellantis, Ford, GM, and Volkswagen. These commitments rely on stable trade conditions to leverage Canadian resources like critical minerals and clean energy. However, the tariffs could increase costs for vehicles like the Prologue, which depends on North American supply chains, and disrupt plans for Honda’s Ohio EV hub, set to begin production in late 2025.

Other automakers have already felt the pinch. Mazda paused production of its Canada-bound CX-50 in Alabama due to Canada’s counter-tariffs, highlighting the ripple effects of trade disputes. Industry analysts estimate that the tariffs could raise new car prices by $4,000 to $5,300 USD, potentially dampening EV adoption at a time when affordability remains a key barrier.

Regulatory and Political Responses

Political leaders across Canada’s spectrum have weighed in. Conservative Leader Pierre Poilievre condemned the U.S. tariffs as “unfair targeting,” advocating for sustained counter-tariffs. NDP Leader Jagmeet Singh proposed stricter measures, suggesting that automakers like Honda, which benefit from public subsidies, should be barred from relocating infrastructure.

“If you’re going to sell a car in Canada, you have to have a footprint in Canada,” Singh said, emphasizing the country’s 40-million-strong market.

Carney suggested that the U.S. might need to permanently exempt Canadian auto parts from tariffs to preserve industry integration. Such an exemption, currently temporary, could ease pressures on Honda and others but requires delicate negotiations amid ongoing trade tensions.

EVXL’s Take: Honda’s Reported Commitment to Canada Signals EV Stability, but Trade Risks Persist

Canadian officials’ statements, citing assurances from Honda Canada, suggest the company remains committed to its Alliston operations and its $11 billion USD EV supply chain investment. This aligns with Honda’s long-term vision to produce 240,000 EVs annually in Canada by 2028, supporting models like the Prologue and future 0 Series EVs. The absence of a direct public statement from Honda leaves room for caution, but the reported stance reinforces Canada’s role in its North American EV strategy.

Still, U.S. tariffs could raise costs for hybrids like the CR-V Hybrid or disrupt supply chains, potentially delaying Alliston’s EV ramp-up. EVXL readers should note that while Canada’s incentives bolster local production, ongoing trade uncertainties demand close attention to ensure Honda’s EV affordability and timelines remain on track.