Honda, a leading automaker, is adjusting its strategic focus in response to changing market demands. The company has decided to shift its focus from electric vehicles (EVs) to hybrid vehicles, citing a slowdown in demand for EVs. This shift in strategy has led to a reduction in planned investments for electrification and software through the 2030 business year.
Honda’s CEO, Toshihiro Mibe, stated that based on the current market conditions, the company expects EV sales in 2030 to fall below the previously targeted 30%. He mentioned that battery-powered cars might only constitute around 20% of Honda’s sales by 2030. In contrast, the automaker anticipates selling between 2.2 million and 2.3 million hybrid vehicles by 2030, with plans to launch 13 next-generation hybrid models globally over the next four years.
Despite these adjustments, Honda remains committed to its long-term goal of having all new car sales be comprised of battery-powered and fuel-cell vehicles by 2040. The company is also bracing for a financial impact from US President Donald Trump’s auto tariffs, projecting a hit of Y450bn ($3bn) to its full-year profit. As a response to the tariffs, Honda plans to transfer some vehicle production from Japan to the US.
Earlier this month, Honda announced a two-year delay in a C$15bn ($10.7bn) plan to establish an EV production base in Ontario, Canada, due to reduced demand for electric cars. However, the company is still moving forward with its plans to develop a hybrid system for large-size models, set for release in the latter half of the decade.
In conclusion, Honda’s strategic shift towards hybrid vehicles reflects the company’s adaptability to market trends and its long-term commitment to sustainable mobility. Despite challenges such as changing market demands and tariffs, Honda remains focused on innovation and achieving its ambitious goals for the future of automotive technology.
