Toronto, Ontario --A week after announcing it would indefinitely delay plans to develop electric batteries and vehicles in Ontario, Honda has revealed it is scaling back EV production around the world and focusing on hybrid vehicles.
This week, the Japanese OEM announced a significant shift in its global electrification strategy related to a slowdown in EV market growth and evolving environmental regulations.
The company now plans to focus on hybrid electric vehicles and the integration of intelligent technologies, including next-generation advanced driver-assistance systems, in order to make its offerings more competitive.
"The Honda global EV sales ratio in 2030 is now expected to fall below the previously announced target of 30 percent," Honda's chief executive officer, Toshihiro Mibe said, according to a press release. "On the other hand, current market demand for HEV models is high. "
Mibe also told reporters the company will reassess the company's powertrain portfolio, emphasizing the development of HEVs as a transitional solution toward full electrification.
"Therefore, Honda will position its HEVs, mostly next-generation HEV models to be introduced to market in 2027 onward, as the powertrain that will play a key role during the transition period toward the popularization of EVs and further enhance its HEV lineup."
The revised plan anticipates that EVs will comprise less than 30 percent of Honda's global sales by 2030, a decrease from previous targets, while aiming for HEV sales to reach 2.2 million units the same year.
To make its hybrid vehicles more popular, the OEM is pursuing cost reduction strategy focused on batteries and motors. "Through these initiatives, along with an increase in sales volume, Honda is aiming to reduce the cost of the next-generation hybrid system by more than 50 percent compared to the hybrid system installed to models introduced in 2018 and by more than 30 percent compared to the hybrid system introduced in 2023 to current models."
Honda is also investing in the development of next-generation ADAS, designed to assist drivers throughout entire routes, including complex urban environments. By leveraging technologies from its automated driving research, it aims to enhance safety and comfort in its vehicles.
