KATHMANDU: Japanese automaker Honda has announced a strategic shift in its electrification plans by reducing its investment in electric vehicles (EVs) and placing greater emphasis on hybrid technology. The move comes amid a global slowdown in EV demand.
Honda—the second-largest Japanese automaker—has scaled back its earlier target of making 30% of its vehicle sales electric by 2030. Honda now expects EVs to account for only about 20% of its total sales by that time.
“We find it difficult to predict the market, but for now, we see EVs reaching around one-fifth of our sales,” Honda CEO Toshihiro Mibe said at a press event in Tokyo recently.
Earlier this month, Honda announced that it would pause a $10.7 billion EV production project in Ontario, Canada, citing slower demand for electric vehicles.
As part of this shift, Honda has reduced its planned investment in electrification and software by 30% to around $48.4 billion. The decision mirrors a broader trend in the automobile industry as several global automakers are putting focus back on hybrids as governments ease their strict EV sales targets and emission timelines.
For Example, US President Donald Trump has rolled back a Biden-era executive order that aimed to make all new vehicle sales electric by 2030.
Focus Shifts to Hybrids
Honda is planning to launch 13 new hybrid models globally between 2027 and 2031. The company already offers hybrid variants of its popular models like Civic, Accord and CR-V.
It is also developing a next-generation hybrid system for larger vehicles, which are expected to debut in the second half of this decade. Honda aims to sell between 2.2 million and 2.3 million hybrid vehicles by 2030. In comparison, it sold 868,000 hybrid units out of 3.8 million total vehicle sales last year.
Even though Honda is scaling down its EV goals, the company says it remains committed to its long-term sustainability goals. The company has reiterated its target of achieving carbon neutrality by 2050, with all new vehicles expected to be either battery-electric or fuel-cell powered by 2040.
In 2026, Honda will launch the “Honda 0 Series”, a new line of advanced, software-defined EVs. These models will feature the ASIMO OS, a proprietary operating system for personalized driving experiences, and a high-performance AI chip developed in collaboration with Renesas Electronics.
Earlier this month, Honda announced that it would pause a $10.7 billion EV production project in Ontario, Canada, citing slower demand for electric vehicles.
The company is also debuting its redesigned “H mark” logo on its EVs and flagship hybrid models from 2027. According to the company, this updated logo symbolizes Honda’s vision for smarter and more sustainable mobility.
Honda is positioning itself to offer flexible, eco-friendly mobility solutions that align with evolving market dynamics and consumer preferences.
