- Honda is slashing its planned investment in EVs by 30%.
- The automaker said the current market slowdown led it to this decision.
- In the next six years, Honda will launch 13 all-new hybrids globally.
Japan’s Honda Motor will scale back its investment in the next generation of electric vehicles and car software by 30% due to slowing demand. At the same time, the automaker will expedite the launch of more hybrid models.
“Based on the current market slowdown, we expect EV sales in 2030 to fall below the 30% that we previously targeted,” said Honda CEO Toshihiro Mibe today. He added that electric cars might make up around 20% of the company’s sales by the end of the decade.
This was Honda’s initial EV plan. Its future is now uncertain.
Photo by: InsideEVs
Previously, Honda said it would invest $69 billion (10 trillion yen) by 2030 to boost its electric vehicle and software game as the market continues to grow. Now, that figure has been reduced to $48.4 billion (7 trillion yen) because the company believes it can’t sell as many EVs as it originally planned.
Earlier this year, the Japanese car manufacturer said it would launch a pair of brand new electric models designed from the ground up using an all-new centralized electrical/electronic architecture that is capable of doing Level 3 autonomous driving–that’s hands-off, eyes-off.
The first two models, called the 0 Saloon and 0 SUV, caught the attention of this year’s CES attendees with their futuristic, wedge-like design. Both cars will be assembled at Honda’s Ohio-based EV hub starting next year. Besides the sedan and SUV, more battery-powered models were supposed to follow, including a budget-minded crossover, but now that might be in the air, as the automaker is scaling back its investment. Honda did not say how the investment scale-back would affect its plans in the United States.
The cut comes after Honda said earlier this month that it would pause its $10.7 billion plan to transform its factory in Ontario, Canada, into an EV-building hub that would support the one in Ohio. The upgrade, which includes several battery and cell manufacturing plants, has been put on hold for two years.
Under the new plan, Honda wants to launch 13 all-new hybrid models globally by 2031. Furthermore, in the second half of the decade, a hybrid system will make its way into several large models. The automaker expects to sell between 2.2 to 2.3 million hybrids by 2030.
All this being said, the Japanese company is adamant that its long-term plan of having battery-powered and fuel-cell vehicles make up all of its new car sales by 2040 remains unchanged.
Honda’s relationship with electric cars has been somewhat rocky. Despite developing one of the world’s first EVs without lead-acid batteries back in the 1990s, the automaker’s portfolio of battery-powered models has been extremely slim over the years. It currently sells two electric crossovers in the United States, the Honda Prologue and Acura ZDX, both of which have been developed in cooperation with General Motors. That’s why the move to a new platform developed entirely in-house is such a big deal, not to mention just how cool the 0 Saloon looks. Let’s just hope Honda keeps its eyes on the prize and doesn’t abandon its plan.
