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Honda Taps the Brakes on EV Investment, Betting Big on Hybrids
Tokyo – Honda announced Tuesday it’s scaling back its electric vehicle investment plans, citing uncertainties in the EV market. While remaining committed to carbon neutrality by 2050, CEO Toshihiro Mibe revealed a revised investment strategy, reducing the previously announced ¥10 trillion electrification budget to ¥7 trillion through March 2021.
This shift comes as Honda re-evaluates its EV production plans, including stepping back from establishing a dedicated EV value chain in Canada. Mibe acknowledged this will likely lower Honda’s projected global EV sales ratio for 2030, which was initially targeted at 30%.
However, Honda isn’t abandoning electrification altogether. The company sees strong potential in the hybrid electric vehicle (HEV) market and plans to make its 2027 HEV models a core focus, bridging the gap until EV demand increases. This strategy aims to boost overall automobile sales to over 3.6 million units by 2030, with a projected 2.2 million HEV sales.
Despite the reduced investment in EVs, Honda expects to generate over ¥12 trillion from its motorcycle division and increased HEV sales, with a target of over ¥1.6 trillion for shareholders. The company emphasizes this revised approach allows for flexibility in responding to market changes while maintaining profitability.
Honda also plans to enhance both its EV and HEV offerings with advanced driver-assistance systems (ADAS), further strengthening its position in the evolving automotive landscape.