Honda Scales Back Its Global EV Plans to Focus on Hybrids

In light of recent changes in the EV market, Honda has revised its global EV plans by lowering sales targets & scaling back investments.

Honda has announced a revamp in its global EV plans, as it now turns its attention to hybrid technologies. Announced during the brand’s annual business briefing, the Japanese automaker has decided to lower its EV sales target and scale back any EV-related plans in response to the volatile situation in the current global EV market.

According to Honda CEO Toshihiro Mibe, the automaker has dropped its EV investments from JPY 10 trillion (RM297 billion) to JPY 7 trillion (RM208 billion), citing several factors like changes in environmental regulations and international trade policies being the force behind this decision. With this investment reduction, Honda has also amended the forecasted ratio of its EV production, going from the previous target of 30% to somewhere closer to the 20% mark, Mibe said.

In place of these reduced investments and production targets of EVs, Honda has now instead shifted their focus onto hybrids, where the automaker believes the powertrain will play an integral role in its transition from full combustion to fully electric. With this, Honda has announced that it will launch a series of next-gen hybrid (HEV) models from 2027 onwards, with no less than 13 HEV models poised to be launched globally by the end of the decade.

To go with these new and ambitious hybrid plans, Honda plans to introduce its next-gen e:HEV hybrid platform that promises to be lighter and more stable than the current unit, while at the same time launching a new all-wheel drive (AWD) drive unit. The next-gen e:HEV system will focus on increasing the driving efficiency, with a target to improve its fuel economy by more than 10% over the current system.

More importantly, Honda also plans to reduce the cost of its next-gen hybrid system by more than 30% compared to the current system, where the automaker aims to reduce the cost of manufacturing key components like the battery pack and electric motors. To do so, Honda has intended to work closely with its suppliers in the development of these components while at the same time improving their production efficiency.

Specifically for North American markets, the automaker has unveiled plans to introduce a new hybrid system specially catered for large-sized vehicles. Additionally, the new H mark previously reserved for its next-gen EV models will now be used in some of its next-gen HEV models.

Honda CEO Toshihiro Mibe

With these major amendments in its future plans, Honda has now increased its global sales volume in 2030 from the current 3.6 million units. Despite the scaled-down investments in EVs, Honda's CEO insisted that the automaker has yet to abandon its EV path entirely and the technology would still be the optimal solution for the automaker to achieve its carbon neutrality target.