Honda Motor Co. has announced a significant shift in its vehicle strategy, scaling back its ambitious electric vehicle (EV) investment plans in response to a global slowdown in EV demand. 

The Japanese automaker will instead pivot towards hybrid vehicles, which have seen a resurgence in popularity across key markets.

The company said that it would reduce its planned investment in electrification and software by 30% to ¥7 trillion (approximately $48.4 billion) by the 2030 financial year. Honda also scrapped its previous target for EVs to account for 30% of its total sales by that year.

“Honda is responding to current market realities,” a company spokesperson said. “While we remain committed to a carbon-neutral future, we are aligning our strategy with consumer demand and the evolving regulatory environment.”

This strategic realignment comes as several global car manufacturers, including rivals like Nissan and Jaguar Land Rover, have also pulled back on EV commitments amid easing government regulations and changing market dynamics. 

In the United States, former President Donald Trump recently revoked a Biden-era executive order that aimed for all new vehicle sales to be electric by 2030.

In place of its earlier EV focus, Honda will roll out 13 next-generation hybrid models globally between 2027 and 2031. 

Currently, Honda offers over a dozen hybrid models worldwide, though only three — the Civic (in both hatchback and sedan versions), the Accord, and the CR-V — are sold in the US.

“We’re expanding our hybrid offerings because that’s where we see strong and sustained demand,” the spokesperson added. “Our aim is to sell between 2.2 and 2.3 million hybrid vehicles annually by 2030 — a significant increase from the 868,000 hybrids sold in 2024.”

Honda is also developing a new hybrid system tailored for large-size vehicles, which is expected to debut in the latter half of this decade.

Earlier this month, Honda paused a C$15 billion (US$10.7 billion) plan to build an EV production facility in Ontario, Canada, citing sluggish electric vehicle demand as the primary reason.

Despite the shift in near-term strategy, the automaker insists its long-term commitment to carbon neutrality remains unchanged. “Honda still intends for all of its new car sales to be battery electric or fuel-cell vehicles by 2040,” the spokesperson confirmed.

Honda is not alone in adjusting its course. Nissan recently abandoned a planned $1.1 billion battery factory in Kyushu, Japan, just months after unveiling the project. 

Similarly, Jaguar Land Rover has reportedly shelved plans to manufacture EVs at Tata Motors’ upcoming $1 billion plant in southern India.

As the global auto industry recalibrates its approach to electrification, Honda’s pivot underscores a broader reassessment of how — and how quickly — the transition to electric mobility can be achieved.

Boluwatife Enome

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