Honda Cuts Electric Vehicle Investment, Shifts Focus to Hybrids Amid Slowing Demand
- tech360.tv
- 12 hours ago
- 2 min read
Honda Motor Co. announced Tuesday it will reduce its investment in electric vehicles (EVs) and prioritise hybrid models, citing weakening global demand for EVs.
The Japanese automaker has scrapped its previous goal of having EVs make up 30% of its sales by the 2030 financial year. Instead, it now expects EVs to account for about 20% of sales by then, according to Chief Executive Officer Toshihiro Mibe.
Honda will cut its planned investment in electrification and software by 30%, bringing the total to 7 trillion yen (USD 48.4 billion) by 2030.
The move aligns Honda with other global carmakers scaling back EV plans as governments ease emissions targets and timelines. In the United States, former President Donald Trump revoked an executive order from the Biden administration that aimed for all new vehicles sold by 2030 to be electric.
Honda plans to launch 13 next-generation hybrid models globally between 2027 and 2031. Currently, it offers more than a dozen hybrid models worldwide, but only three in the U.S.: the Civic (available in hatchback and sedan), the Accord, and the CR-V.
The company is also developing a hybrid system for large-size models, expected to debut in the second half of the decade.
Honda aims to sell between 2.2 million and 2.3 million hybrid vehicles by 2030, a significant increase from the 868,000 sold in 2023. Last year, Honda sold a total of 3.8 million vehicles globally.
Earlier this month, Honda paused a CAD 15 billion (USD 10.7 billion) plan to build an EV production facility in Ontario, Canada, due to softening demand.
Despite the shift, Honda maintains its long-term goal for all new car sales to be battery-powered or fuel-cell vehicles by 2040.
Other automakers have also scaled back EV investments. Nissan recently cancelled plans for a USD 1.1 billion battery factory in Kyushu, Japan. Jaguar Land Rover has reportedly shelved plans to produce EVs at Tata Motors’ upcoming USD 1 billion factory in southern India.
Honda reduces EV investment by 30% to USD 48.4 billion
EV sales target for 2030 cut from 30% to 20%
Thirteen new hybrid models to launch globally from 2027
Source: REUTERS