Honda Cuts EV Investment 30%, Shifts Focus to Hybrids by 2030

Honda Motor Co. is reducing its planned investment in electric vehicles (EVs) by 30%, cutting the budget from 10 trillion yen to 7 trillion yen through 2030, due to slower-than-expected EV adoption and market demand. The company now expects EVs to represent about 20% of its total vehicle sales by 2030, down from the previous target of 30%, and will shift its focus toward expanding hybrid electric vehicle (HEV) offerings, planning to launch 13 new hybrid models starting in 2027. Honda is postponing its planned EV and battery factory in Canada by two years and reassessing the project amid changing market conditions and policy uncertainties, especially around US EV subsidies. Despite scaling back EV investments, Honda maintains its long-term goal of transitioning all new vehicle sales to EVs and fuel-cell vehicles by 2040 and aims to double global hybrid sales to over 2.2 million units by 2030. The company also plans to strengthen its profitable motorcycle business and expects to generate significant cash flow due to reduced capital expenditures. CEO Toshihiro Mibe emphasized that these strategic changes respond to market slowdowns and regulatory shifts, with a continued commitment to automobile electrification through hybrid technology.