On the Dash:
- Honda is eyeing a new U.S. plant to meet growing hybrid demand, its eighth domestic facility.
- The push follows Honda’s first annual loss and a retreat from its EV strategy.
- A final decision may hinge on whether the U.S. renews its USMCA trade agreement.
Honda Motor Co. is looking to build its next manufacturing plant in the United States as demand for its hybrid lineup outpaces current capacity, a senior executive told reporters at a briefing in Washington, according to Bloomberg.
Noriya Kaihara, Honda’s executive vice president, said the automaker needs more North American production to keep up with customer demand. He said Honda plans to decide on a location within the next year or two, with a goal of having the plant running by around 2030.
“We really need additional capacity in order to fulfill customer needs,” Kaihara said. “The next production facility should be within North America.”
Honda currently builds vehicles in Alabama, Indiana and Ohio, with engine and transmission plants in Alabama, Georgia and Ohio. It also runs assembly plants in Canada and Mexico. A new U.S. facility would be Honda’s eighth in the country.
Hybrid demand drives the decision
The plant discussion follows a major strategy shift for Honda. The automaker canceled three planned battery-electric models for the U.S. market earlier this year and posted its first annual loss since its founding in 1948. Honda has since redirected resources toward hybrids and traditional combustion vehicles.
The company now plans to launch 15 new hybrid models by March 2030, most aimed at North America. Hybrids made up about a third of Honda’s U.S. sales volume in June, while deliveries of the Prologue, its only fully electric U.S. model, fell. Honda’s overall U.S. sales rose 2.4% in the first half of the year, driven by hybrid versions of the CR-V, Accord and Civic.
USMCA uncertainty clouds the timeline
Trade policy has grown more uncertain since July, when the Trump administration chose not to renew the North America free trade deal and shifted to rolling negotiations instead. President Trump has also threatened a 50% tariff on vehicles and parts made in Canada starting Jan. 1.
“If there is no USMCA agreement in the future, we may have to change our direction,” Kaihara said. Kaihara added that Honda is not currently passing tariff costs on to buyers.
Honda’s interest in a new North American plant was first reported last month by Japan’s Yomiuri newspaper, citing an interview with CEO Toshihiro Mibe. Kaihara’s comments in Washington mark the company’s clearest public confirmation yet.
