Honda is shifting its strategic focus from electric vehicles (EVs) to hybrid vehicles in response to slowing demand for electric vehicles (EVs).
The company announced a reduction in its planned investment for electrification and software through the 2030 business year to Y7tn ($48.4bn) from the previously planned Y10tn, reported Reuters.
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Honda CEO Toshihiro Mibe stated: “Based on the current market slowdown, we expect EV sales in 2030 to fall below the 30% that we previously targeted.”
He further noted that battery-powered cars might constitute only around 20% of Honda’s sales by 2030.
The automaker anticipates selling between 2.2 million and 2.3 million hybrid vehicles by 2030, although it has not set a total sales target for that year.
Honda plans to launch 13 next-generation hybrid models globally over the next four years, starting in 2027.
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By GlobalDataAdditionally, the company is developing a hybrid system for large-size models, slated for release in the latter half of the decade.
Earlier this month, Honda announced a two-year delay on a C$15bn ($10.7bn) plan to establish an EV production base in Ontario, Canada, due to the reduced demand for electric cars.
Despite these adjustments, Honda remains committed to its long-term goal of having battery-powered and fuel-cell vehicles comprise all new car sales by 2040.
Also, it anticipates a financial impact from US President Donald Trump’s auto tariffs, projecting a Y450bn ($3bn) hit to its full-year profit.
Honda’s operating profit is expected to decrease to approximately Y500bn for the fiscal year ending March 2026.
In response to tariff, the company planned to transfer some vehicle production from Japan to the US.
