Honda Cuts EV Investment, Shifts Focus to Hybrids Amid Weak Demand

Honda Motor (NYSE:HMC) is scaling back its electric vehicle (EV) ambitions, cutting planned investment by 30% to 7 trillion yen ($48.4 billion) through fiscal 2030, citing weaker-than-expected demand. CEO Toshihiro Mibe said EVs may only represent around 20% of sales by then—well below its previous 30% target.

Instead, the Japanese automaker is pivoting toward hybrid vehicles, which are seeing stronger consumer interest globally. Honda plans to launch 13 new-generation hybrid models between 2027 and 2031. It currently offers over a dozen hybrid vehicles worldwide, though only three—Civic, Accord, and CR-V—are sold in the U.S.

The company aims to sell between 2.2 million and 2.3 million hybrid units annually by 2030, a sharp rise from the 868,000 sold last year. This shift follows broader industry trends, as rivals like Nissan (OTC:NSANY) and Jaguar Land Rover also pull back on EV commitments amid policy changes and softened demand.

Earlier in May, Honda paused its C$15 billion ($10.7 billion) EV production plant in Ontario, Canada for two years. Meanwhile, U.S. policy shifts—such as President Trump’s repeal of an executive order targeting 100% EV sales by 2030—have further dampened industry momentum.

Despite the current slowdown, Honda maintains a long-term goal to transition entirely to battery electric and fuel-cell vehicles by 2040. However, for now, hybrids are the central focus as the company adapts to a more cautious and uncertain EV market.