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Honda to scale back on EVs, focus on hybrids

Published: 20 May. 2025, 19:02

Honda CEO Toshihiro Mibe speaks at a business briefing in Tokyo, Japan on May 20, 2025. [REUTERS/YONHAP]

Honda said on Tuesday that it was scaling back its investment in EVs given slowing demand and would be focusing on hybrids, now far more in favor, with a slew of revamped models.

Japan's second-biggest automaker after Toyota Motor also dropped its target for EV sales to account for 30 percent of its sales by the 2030 financial year.

"It's really hard to read the market, but at the moment we see EVs accounting for about a fifth by then," CEO Toshihiro Mibe told a press conference.

Honda has slashed its planned investment in electrification and software by then by 30 percent to 7 trillion yen ($48.4 billion).

It's one of a number of global car brands dialing back EV investment due to the shift in demand in favor of hybrids and as governments around the world ease timelines to meet emission rules and EV sales targets.

U.S. President Donald Trump has, for example, revoked a Joe Biden administration executive order that sought to ensure all new vehicles sold in the United States by 2030 are electric.

Honda plans to launch 13 next-generation hybrid models globally in four years from 2027. At the moment, it has just three hybrid models in the United States — the Civic, which comes in hatchback and sedan versions, the Accord and the CR-V.

Honda CEO Toshihiro Mibe speaks at a business briefing in Tokyo, Japan on May 20, 2025. [REUTERS/YONHAP]

It will also develop a hybrid system for large-sized models that it plans to launch in the second half of the decade.

The automaker is aiming to sell 2.2 million to 2.3 million hybrid vehicles by 2030, a huge jump from 868,000 sold last year. That also compares with a total of 3.8 million vehicles sold overall last year.

Earlier this month, Honda announced it had put a 15 billion Canadian dollar plan to build an EV production base in Ontario, Canada, on hold for about two years due to slowing demand for electric cars.

Honda said, however, that it still plans to have battery-powered and fuel-cell vehicles make up all of its new car sales by 2040.

Other automakers that have scaled back EV investment include its struggling rival, Nissan, which this month abandoned a plan to build a $1.1 billion battery factory on Japan's southwestern island of Kyushu just months after it had announced the project.

Jaguar Land Rover has shelved plans to build EVs at parent company Tata Motor's upcoming $1 billion factory in southern India, sources have said.

Reuters