Honda Motor Co. is tapping the brakes on its ambitious EV production expansion in Canada after reporting a dramatic downturn in profits driven by U.S. tariffs and a shrinking Chinese car market.
Honda’s FY2025 net income declined by nearly one-quarter to ¥835.8 billion ($6.2 billion). While revenue grew slightly, operating profit fell more than 12%, undercut by higher costs and poor sales in key regions.
Executives now plan to delay an $11 billion EV and battery plant project in Ontario, citing uncertain ROI under current trade conditions. The move marks a tactical retreat amid heightened geopolitical uncertainty.
The company’s revised FY2026 forecast projects profits falling more than 70%, down to ¥250 billion. This pessimistic outlook underscores just how exposed Honda is to global supply chain shifts and regional trade policies.
However, strong performance from its motorcycle division and Southeast Asian markets has helped buffer some losses.
Honda says it remains committed to electrification, but will take a more phased approach to expansion, prioritizing stability and regional production efficiency.
