Auto giant Honda Motor recently paused its ongoing development of full electric vehicles (EVs) in favour of hybrids. According to news outlet Nikkei Asia, Honda will be shifting its production and development efforts to hybrid vehicles in the wake of slow EV demand.
ABANDONED PLANS
Earlier this year, Honda announced that it cut its R&D budget and EV plans. Initially, the Japanese car giant intended to release a line-up of seven EVs from 2026 to 2030. Three of the vehicles in this line-up was an electric SUV marketed for families and large groups, set to rival the Kia EV9. The development of the SUV was then cancelled due to low demand and potential delays, especially in the US.
As its primary market is the US, Honda is wary of the upcoming changes President Trump may make in the country’s EV policies. Already, the 47th President repealed his predecessor’s EV adoption incentives upon returning to office. Furthermore, the Trump administration passed a bill that officially halts any tax credits upon purchasing an EV.
Honda’s planned SUV line-up was meant to answer a popular demand in the US and cover 30 per cent of its global scales. However, its production and development costs are too high to account for sluggish EV demand in the region. Pushing through with an EV line-up could limit Honda’s production volume and strain financial resources at the same time.
A NEW STRATEGY
Honda’s new perspective does not only apply to its US, but to the general global market. The company has scaled back its EV investments from JPY 10 trillion (AUD 103.5 billion) to JPY 7 trillion (AUD 72.45 billion). One of the larger parts of this budget was the intended electric SUV.
With investments placed elsewhere, Honda’s new plan is to increase production and development in competitive hybrid models. Instead of a 7 EV line-up, Honda will release 13 hybrid models globally, starting in 2027 until 2031. In addition to this plan, the auto maker aims to sell 2.2 million units of its new hybrids by 2030. For now, Honda’s decision to focus on hybrids instead of EVs will serve as a transition before it tackles EVs once again.
Honda has not completely abandoned EVs, as it has yet to release its 0 SUV, 0 Saloon, and the Super EV concept, a supposed successor of the Honda e.
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