Honda Motor Co.’s decision to boost electric vehicle production in the United States could affect the North American automaker’s overall production strategy as it looks for ways to avoid President-elect Donald Trump’s proposed import tariffs.
While automaker executives have acknowledged that Trump’s reelection could reduce U.S. tax credits on electric vehicles, the company remains committed to retooling its Ohio manufacturing sites for electric vehicle production to bolster sales in the United States.
Shinji Aoyama, Honda’s executive vice president and representative executive officer, said during the company’s third-quarter earnings call with analysts on Nov. 6 that converting its sites in Ohio for electrification was a long-time decision term taken to improve the automaker’s position in the North American electric vehicle market.
But Honda also views its U.S. investments as flexible, allowing it to adapt to market conditions, Aoyama said.
“Therefore, the impact on investment plans, the presidential election will not have any impact on us,” he said.
However, Honda, like other automakers, is also pondering what to do about manufacturing operations in Mexico should Trump impose a blanket 10% tariff on all products entering the United States, as discussed during the campaign .
Aoyama said Honda produces about 200,000 vehicles a year in Mexico, of which about 80% or 160,000 are sold in the United States.
Vehicles that will be built in Mexico to be shipped to the United States in 2025 will be subject to any new tariffs imposed by the Trump administration, Aoyama said, describing the situation as an area “that requires some action because we cannot relocate manufacturing sites production suddenly.” .”
He acknowledges that Honda and its competitors face a similar problem, but believes that implementing new policies would take time, creating opportunities for negotiation.
“I don’t think the tariff will be imposed anytime soon,” Aoyama said. Though that could ultimately lead to production shifts where manufactured goods won’t be subject to U.S. tariffs, he added.
For now, Honda, like many manufacturers with operations in Mexico hoping to take advantage of the nearshoring wave, awaits action from the incoming administration.
“We have to see what happens and what we can do,” Aoyama said.