Honda has decided to produce its next-generation Civic hybrid in the U.S. state of Indiana, instead of Mexico, to avoid potential tariffs on one of its top-selling car models, according to three people familiar with the matter.

President Donald Trump’s proposed tariffs on Mexico appear to have impacted Honda‘s plans for its new Civic hybrid vehicles. The automaker is reportedly preparing to move production of its electric Civic model from Mexico to Indiana,

KEY TAKEAWAYS Honda plans to produce its next Civic hybrid in Indiana rather than Mexico to avoid the impact of possible upcoming tariffs, according to a Reuters report,.According to the report, around 80% of Honda’s production in Mexico goes to the U.