{"id":657447,"date":"2026-05-09T04:29:11","date_gmt":"2026-05-09T04:29:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/657447\/"},"modified":"2026-05-09T04:29:11","modified_gmt":"2026-05-09T04:29:11","slug":"honda-is-giving-up-its-ontario-ev-plant-it-may-be-time-to-court-the-chinese","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/657447\/","title":{"rendered":"Honda is giving up its Ontario EV plant. It may be time to court the Chinese"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

Honda employees work along the vehicle assembly line in Alliston, Ont., in 2024.Nathan Denette\/The Canadian Press<\/p>\n

If Canada and Ontario have a Plan B for the auto industry, now would be a good time to roll it out. If they don\u2019t, what\u2019s left of Canadian manufacturing is in trouble.<\/p>\n

Ontario and the feds must realize that no amount of subsidies is going to create auto jobs \u2013 or even keep the existing ones \u2013 in the Donald Trump era. More proof of the subsidy fallacy came this week, when Honda \u201cindefinitely suspended,\u201d that is, killed, its planned $15-billion investment<\/a> in Alliston, Ont., to build electric vehicles and the batteries that power them. <\/p>\n

It was to have been one of the biggest investments in Canadian industrial history. The only good news is that neither Ontario nor Ottawa, which had agreed to pump up to $2.5-billion each into the new Honda plant, had yet to disperse any of the funds. <\/p>\n

Blame Mr. Trump\u2019s tariffs and the waning appetite for EVs in the U.S. and Canada. Stellantis, owner of the Jeep, Fiat and Peugeot brands, and General Motors are also cutting back in Canada. They have closed or sold plants, moved production to the U.S. or dropped third shifts at factories. <\/p>\n

Thousands of auto jobs have disappeared and there is no reason to think the worst is over as long as Mr. Trump is U.S. President and armed with his tariffs bazooka. This week, he raised tariffs on cars and trucks imported from the European Union to 25 per cent from 15 per cent. He could raise them again on Canadian imports, or blow up the U.S.-Mexico-Canada Agreement (USMCA) , which is under review. The point being, Canada is a hard sell for any automaker from any country looking to expand its global footprint. <\/p>\n

Except for one \u2013 China.<\/p>\n

Three Chinese EV heavyweights \u2013 BYD, Chery and Xiaomi \u2013 have made it known that they would consider making EVs in Ontario, though the definition of \u201cmaking\u201d would need to be carefully defined.<\/p>\n

Ontario and the feds want to see local manufacturing that would create a domestic supply chain, skilled jobs and research and development. Stellantis and Leapmotor, a Chinese EV company, recently proposed using an existing Stellantis plant to bolt together EVs from kits imported from China. Ontario Premier Doug Ford rightfully called the proposal \u201cunacceptable\u201d since it would add no local value.<\/p>\n

But Ontario and the feds might be able to convince the Chinese EV makers to build a proper factory. If the Americans and the Japanese no longer want to invest in new plants in Canada, why not give them a shot? <\/p>\n

Chinese companies play the long game. They know that neither Mr. Trump nor the tariff wars are forever. They know that EVs are the future. In the EU in January, 69 per cent of new cars sold were electrified some way: They were pure battery EV (as Teslas are) or plug-in hybrid vehicles or regular hybrids (as many Toyotas are). China\u2019s top EV maker, BYD, now outsells Tesla worldwide.<\/p>\n

They also know that Canada wants to downgrade its overwhelming reliance on the U.S. market and trade more with the EU. Chinese EV companies considering Canadian investments no doubt have studied every paragraph of CETA \u2013 the Comprehensive Economic and Trade Agreement between Canada and the EU \u2013 which has been provisionally in place since 2017. <\/p>\n

Under CETA, Canadian-made EVs would get duty-free treatment in the EU if 50 per cent or more of the vehicle\u2019s content qualifies as \u201coriginating\u201d in Canada. The problem is that the batteries represent 25 to 40 per cent of the value of an EV. If the batteries of any Canadian-made EVs come from China, the vehicles might fail the Canadian-content rules. <\/p>\n

The upshot is that any Chinese EV make who wants to build a factory in Canada would have to buy Canadian-made batteries to penetrate the EU market. That\u2019s a big ask, not an impossible one. The collapse of Honda\u2019s Ontario project does not mean the province is devoid of battery making capabilities. Volkswagen, for instance, is pushing ahead with a massive $7-billion battery plant in St. Thomas, Ont., which is to open next year.<\/p>\n

It\u2019s not fanciful that China would want an EV and battery beachhead in North America. With the U.S. out of the picture, Canada (meaning Ontario) could emerge as China\u2019s default manufacturing spot in the same way Hungary has in the EU.<\/p>\n

In Hungary, Chinese companies are spending some US$10-billion to build EV and battery factories. The local production means they are exempt from import tariffs. Europe\u2019s streets are filling with small, inexpensive Chinese EVs, such as the BYD Dolphin Surf.<\/p>\n

Canadian politicians may resist courting Chinese EV and battery companies. For decades, they have been conditioned to treat Chinese companies in general with suspicion. There could be security risks, their governance standards are lacking, they\u2019re unfairly subsidized by the Chinese government \u2013 that sort of thing.<\/p>\n

All these concerns are valid. But they could all be managed. With the American and Japanese carmakers downgrading their presences in Ontario, the province and Canada need a new strategy and China seems to be it. Follow the money.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: Honda employees work along the vehicle assembly line in Alliston, Ont., in 2024.Nathan…\n","protected":false},"author":2,"featured_media":657448,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[901,888,902,879,877,903,45,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,912,907,911,905,908,882,898,899,714,897,906,865,61,900,892,886,883,913],"class_list":["post-657447","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-alberta","tag-arts-news","tag-bc","tag-breaking-news","tag-breaking-news-video","tag-british-columbia","tag-business","tag-ca","tag-canada","tag-canada-news","tag-canada-sports","tag-canada-sports-news","tag-canada-trafficcanada-weather","tag-canadian-breaking-news","tag-canadian-news","tag-economy","tag-education","tag-environment","tag-federal-government","tag-foreign-news","tag-globe-and-mail","tag-globe-and-mail-breaking-news","tag-globe-and-mail-canada-news","tag-government","tag-life-news","tag-lifestyle","tag-local-news","tag-manitoba","tag-national-news","tag-new-brunswick","tag-newfoundland-and-labrador","tag-northwest-territories","tag-nova-scotia","tag-nunavut","tag-ontario","tag-pei","tag-photos","tag-political-news","tag-political-opinion","tag-politics","tag-politics-news","tag-quebec","tag-sports-news","tag-technology","tag-travel","tag-trudeau","tag-us-news","tag-world-news","tag-yukon"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/657447","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=657447"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/657447\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/657448"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=657447"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=657447"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=657447"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}