Honda Motor has announced a major strategic shift in its electrification roadmap, scaling back investments in electric vehicles (EVs) and pivoting its focus toward hybrid models in response to weakening global demand for battery-powered cars. The Japanese automaker revealed on Tuesday that it has lowered its planned investment in electrification and software to ¥7 trillion ($48.4 billion) through the 2030 fiscal year, down from ¥10 trillion previously.
Speaking at a press conference, CEO Toshihiro Mibe stated that electric vehicles may comprise only 20% of the company’s sales by 2030, a significant revision from its earlier 30% target. “Based on the current market slowdown, we have revised our outlook for EV sales,” Mibe said.
Hybrid strategy takes center stage
Instead of doubling down on EVs, Honda will aggressively expand its hybrid portfolio. The company expects to sell between 2.2 million and 2.3 million hybrid vehicles globally by 2030. It has plans to introduce 13 new-generation hybrid models between 2027 and 2030, and is also developing a hybrid system for large-size vehicles, expected to launch in the latter half of the decade.
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This shift underscores Honda’s effort to remain agile in a rapidly evolving auto market, where consumer adoption of EVs has not met earlier expectations in key regions like North America and Europe.
Canada EV project on hold, long-term EV goals unchanged
Earlier this month, Honda announced it had paused a C$15 billion ($10.7 billion) plan to build an EV manufacturing base in Ontario, Canada, citing sluggish demand. Despite these near-term adjustments, the company reiterated its commitment to a fully electrified future, maintaining its long-term goal of achieving 100% new car sales from battery electric and fuel-cell vehicles by 2040.
Honda’s updated strategy reflects broader market caution around EV adoption and an increasing reliance on hybrids as a transitional technology in the push toward carbon neutrality.
