Key facts
- Honda may not build a new North American assembly plant without an extension of the USMCA trade deal.
- The automaker is nearing full production capacity in North America and requires additional facilities.
- A decision on the new plant is expected within one to two years, with an operational target of 2030.
- Honda has indefinitely suspended a $15-billion electric vehicle complex project in Ontario, Canada.
- The suspension of the EV project is attributed to waning consumer demand and shifting business conditions.
Honda may reconsider plans for a new assembly plant in North America if the United States-Mexico-Canada Agreement (USMCA) trade deal is not extended, according to a senior executive. Noriya Kaihara, Honda Executive Vice President, told reporters in Washington that the automaker is nearing full production capacity across its North American facilities and requires a new factory to meet demand. He indicated that a decision on the plant, which the company hopes to have operational by around 2030, needs to be made within the next one to two years.
This statement comes as the Trump administration is in negotiations with Canada and Mexico regarding the future of the trade deal. Kaihara suggested that without a renewed USMCA agreement, Honda might alter its expansion strategy.
In a separate development, Honda has indefinitely suspended its $15-billion plan to build an electric vehicle (EV) complex in Ontario, Canada. The company cited evolving business conditions, a shift in its external resource strategy, and changing customer demand as reasons for shelving the project. This EV complex was intended to produce up to 240,000 EVs annually, primarily for the U.S. market, and was supported by significant government funding.
The suspension of the EV project reflects broader trends in the automotive industry, where several manufacturers are scaling back electrification plans due to decreased consumer demand for EVs and policy shifts. Honda's U.S. factories are operating at 85 percent of their 1.2 million total capacity, while all North American facilities are at 90 percent of their 1.8 million capacity. A new plant would provide additional flexibility and support growth in the region, which represents Honda's largest and most profitable market.