Honda Hits The Brakes On EV Push, Bets Big On Hybrid Revival: Report
Honda Motor Co. (NYSE:HMC) reportedly announced Tuesday that it will cut investment in electric vehicles amid weakening demand and instead prioritize hybrids, which are gaining popularity with consumers.
CEO Toshihiro Mibe said EVs are expected to account for about 20% of sales by the target year, though he noted market trends remain uncertain. Honda has reduced its planned electrification and software investment by 30% to 7 trillion yen ($48.4 billion), according to Reuters.
The shift aligns with broader industry trends, as automakers respond to softening EV demand, rising hybrid sales, and relaxed government emissions targets.
Also Read: General Motors Wants To Overturn California’s EV Mandate As Demand Slows In The U.S.
Honda plans to launch 13 new hybrid models globally between 2027 and 2031. It offers over a dozen hybrid models worldwide, but only three in the U.S.—the Civic, Accord, and CR-V. A new hybrid system for larger vehicles is also in development, Reuters mentioned.
The company targets hybrid sales of 2.2 million to 2.3 million units by 2030, up from 868,000 in 2024. Total vehicle sales last year reached 3.8 million.
Last week, Honda Motor forecasted a steep drop in earnings for the fiscal year ending March 31, 2026, citing industry headwinds and currency pressures.
The company expects sales revenue to fall 6.4% to ¥20.3 trillion. It projects operating profit will drop 58.8% to ¥500 billion. Profit before income taxes will likely decline 62.8% to ¥490 billion.
Net profit is expected to fall 64% to ¥325 billion, with profit attributable to shareholders plunging 70.1% to ¥250 billion.
Honda also said it would halt planned expansion due to fluctuating EV demand and uncertainty over U.S. President Donald Trump’s proposed tariffs on imported vehicles. CEO Toshihiro Mibe said the rapidly changing automotive landscape requires greater flexibility.
Honda joins other automakers, including Nissan, in scaling back EV plans. Nissan (OTC:NSANF) recently canceled a $1.1 billion battery plant in Kyushu, Japan, just months after announcing it.
Price Action: Honda Motor shares are trading higher by 0.44% at $29.40 premarket at the last check on Tuesday.
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