Honda to retool Alliston plant for hybrids with $166M

Honda Canada said Monday it will retool its Alliston, Ont., plant to build more hybrid-electric and gasoline-powered vehicles, with governments helping to pay for upgrades that include bringing engine manufacturing back to the site.

The automaker said an initial $166-million investment is part of a broader $867-million commitment to improve quality, efficiency and manufacturing flexibility. The federal government said it will provide $313 million of that total, and the Ontario government will contribute $156 million, according to The Canadian Press.

“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,” Honda Canada president and CEO Dave Jamieson said in a news release.

Honda said the funding will let it keep its workforce of 4,000 Canadian employees across two facilities at the Alliston plant while supporting its Canadian production volumes. More than 400,000 vehicles were built at the site last year, and Honda is Canada’s second-largest auto manufacturer by volume.

Industry Minister Melanie Joly said in a statement the 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.”

The announcement follows Honda’s decision in May 2025 to indefinitely suspend a planned $15-billion electric vehicle complex in Ontario, citing slower growth in the EV market amid the U.S. trade war. That project, announced in 2024, would have included a vehicle assembly plant and battery production facilities and was to receive up to $5 billion in federal and Ontario funding, though no money had been transferred. Honda said at the time that the pause did not affect existing employment or production at Alliston.

The company said in May 2025 that it planned to introduce 15 new Honda and Acura hybrid models globally by 2030, with North America expected to be the main market for many of them. It said it is investing across its manufacturing network in Canada, Ohio, Alabama and Georgia to support that strategy.

The plant support comes as Ottawa and Ontario try to shore up the auto sector. Prime Minister Mark Carney and Premier Doug Ford unveiled an $8.7-billion plan for steel, autos and mining on Oct. 22, and workers at Stellantis voted 97 per cent in favour of a strike mandate with talks still stalled. Joly is also dealing with another industrial file, having asked the Competition Bureau to probe Cleveland-Cliffs over its purchase of Stelco.

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