21 May 2025
Honda Motor Co., Ltd. has unveiled a major overhaul of its automobile electrification strategy in response to the slower-than-anticipated growth in global electric vehicle (EV) markets and rising geopolitical and regulatory challenges. While reaffirming its long-term commitment to carbon neutrality and smart mobility, the company has decided to scale back its short-term EV investments.
Honda Motor Co., Ltd. has unveiled a major overhaul of its automobile electrification strategy in response to the slower-than-anticipated growth in global electric vehicle (EV) markets and rising geopolitical and regulatory challenges. While reaffirming its long-term commitment to carbon neutrality and smart mobility, the company has decided to scale back its short-term EV investments.
At a business briefing in Tokyo, Honda’s Global CEO, Toshihiro Mibe, acknowledged a significant shift in market dynamics since the company’s earlier EV plans. Although Honda continues to view EVs as a critical long-term solution for low-emission mobility, it is now adopting a more flexible dual-track strategy. This involves a renewed emphasis on hybrid electric vehicles (HEVs) as a transitional technology, alongside continued investment in intelligent driving systems.
Key to this pivot is Honda’s plan to bolster its HEV portfolio, using it as a core pillar while it continues to invest in next-generation Advanced Driver Assistance Systems (ADAS). The automaker is independently developing ADAS capable of supporting full-journey driving, including in complex urban environments. These technologies will first roll out in select HEV and EV models launching in North America and Japan beginning in 2027.
In China, where smart mobility is advancing rapidly, Honda will partner with autonomous driving tech company Momenta to localize ADAS features. The company has revised its EV sales expectations for 2030, now anticipating it will fall short of the earlier 30% EV share target. However, Honda is setting an ambitious new target of 2.2 million HEV sales by 2030, contributing to an updated overall goal of over 3.6 million vehicle sales.
Honda also announced plans to introduce 13 new HEV models globally between 2027 and 2031. These models will feature enhanced e:HEV powertrains and new all-wheel-drive systems designed to deliver greater efficiency and a more dynamic driving experience.
Cost optimization is a central focus. Honda aims to reduce the cost of its hybrid systems by over 50% from 2018 levels, and more than 30% compared to 2023 models. This will be achieved through improved production efficiencies, standardized components, and stronger supplier partnerships.
Meanwhile, the company is adjusting its full-EV infrastructure roadmap. While confirming the 2026 launch of its Honda 0 Series, it has postponed the Canadian EV value chain project and delayed dedicated EV plant construction. As a result, Honda has trimmed its total EV-related investment target by JPY 3 trillion (USD 20.7 billion), now standing at JPY 7 trillion (USD 48.3 billion).
To better navigate market volatility, Honda is building a more agile supply chain, emphasizing mixed-model production lines and localized manufacturing to adapt to regulatory shifts and logistics disruptions.
Outside of the automobile segment, Honda’s motorcycle division continues to thrive. It reported record-breaking global sales of 20.57 million units for the fiscal year ending March 2025, representing 40% of the global market. With demand surging in India and the Global South, Honda is ramping up its electric two-wheeler offerings. The company aims to become the global leader in electric motorcycles by 2031, targeting a 50% market share and over 15% return on sales.
Financially, Honda will leverage growth in hybrids and motorcycles to boost profitability and support robust shareholder returns. It plans to reduce EV-related spending by 30%, freeing up capital while staying on track to generate more than JPY 12 trillion (USD 82.8 billion) in revenue over the next five years.
As part of its capital strategy, Honda introduced a Dividend on Equity (DOE) ratio, demonstrating its commitment to aligning shareholder returns with long-term performance.
Summarizing the strategic shift, CEO Mibe emphasized Honda’s focus on building a resilient, future-ready business model that aligns with today’s global realities while driving toward an intelligent and electrified mobility future.
The detailed article published by www.indiatoday.in can be accessed from https://www.indiatoday.in/auto/cars/story/honda-realigns-global-strategy-plans-13-new-hybrids-by-2030-slows-ev-expansion-2727526-2025-05-20
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