The automaker is reportedly preparing to move production of its electric Civic model from Mexico to Indiana, according to three sources cited by Reuters. Mexico is facing a 25% tariff that is slated to begin on Tuesday after a weekslong delay. This comes amid a yearslong border crisis that led to immigrants illegally crossing the border and an increase of fentanyl discovered among states sharing borders with Mexico.

Mexico responded to the tariffs with retaliatory tariffs while also complying with Trump’s orders by sending over 10,000 troops to the border it shares with the U.S.

Fellow Japanese automaker Nissan stopped negotiations on a merger earlier this month but committed to continuing collaboration. Still together, Nissan and Honda would have been the third largest automakers in the world behind Volkswagen and Toyota, respectively.

Honda’s and Nissan’s statements at the time included the commitment that “going forward, the three companies will collaborate within the framework of a strategic partnership aimed at the era of intelligence and electrified vehicles.”

NISSAN AND HONDA MERGER ON PAUSE AFTER NEGOTIATIONS STALL OUT

Honda aims to produce only electric and fuel cell vehicles by 2040. Nissan’s goal is slightly less ambitious: 60% of its sales will be electric and hybrid vehicles by 2030.

Last year, Americans bought over 1,500,000 plug-in and battery electric vehicles. This was almost a fourth of all electric vehicles purchased since 2010. The U.S. is a large part of the market for both Nissan, representing 27% of its 2024 sales, and Honda, representing 37% of its sales that same year.