Honda invests $867 million to retool Ontario plant for hybrid vehicles
The investment will maintain 4,000 jobs and comes after the company paused a $15-billion EV project in Alliston.
ALLISTON · Honda Canada will upgrade its Alliston, Ont., manufacturing facilities to increase output of hybrid-electric and gasoline-powered vehicles. The company announced Monday it is working with the federal and Ontario governments on the project, which includes bringing engine manufacturing back to the site. An initial investment of $166 million is part of a larger $867 million commitment to improve manufacturing quality, efficiency and flexibility. The federal government will provide $313 million of that total, with Ontario contributing $156 million.
Honda Canada president and CEO Dave Jamieson said the investment secures the company's future in Canada. "This renewed investment reinforces Canada’s critical role in Honda’s North American growth and hybrid-electric vehicle strategy and helps position our operations for long-term competitiveness and future opportunities," Jamieson said in a news release. The funding will preserve the jobs of 4,000 employees at the Alliston plant and support current production volumes. The company said the upgrades will also help it meet rising North American demand for hybrid vehicles.
Industry Minister Mélanie Joly said the government funding will protect Canadian jobs and supply chains. "This investment will strengthen our automotive supply chains, support thousands of well-paying jobs in Ontario and across the country, and help build a strong Canadian auto sector where workers build the cars of the future," Joly said in a statement. Ontario Premier Doug Ford called the announcement a vote of confidence in the plant's workforce. He said on social media the province is working to remain competitive and attract global investment in the face of economic uncertainty.
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The announcement follows Honda's decision in May to indefinitely suspend a planned $15-billion electric vehicle complex in Alliston. That project, announced in 2024, would have included an assembly plant and battery production facilities, creating up to 1,000 new jobs. It was eligible for more than $5 billion in government support, but no money had been paid out. The company paused the EV plan due to weaker than expected consumer demand and high development costs, which contributed to a $2.7 billion annual loss.
Honda is now focusing its strategy on hybrid vehicles. In May, the company said it plans to launch 15 new Honda and Acura hybrid models worldwide by 2030, with North America as a primary market. To support this, it is investing in manufacturing sites in Canada, Ohio, Alabama and Georgia. The Alliston plant produced more than 400,000 vehicles last year, making Honda the second largest automaker in Canada by volume. The company also announced a separate $3 billion investment Monday for a new plant in Ohio expected to open in 2029.
With files from The Canadian Press, Global News and CBC News