Honda has announced that it is lowering its sales targets and scaling back on its investment plans for pure electric vehicles as part of a strategy realignment. The Japanese automaker said that the decision to do so was in light of recent changes in the EV market environment.
In its annual business update briefing held earlier today, Honda CEO Toshihiro Mibe said the company will now invest seven trillion yen (RM208.2 billion) in EVs and software development over the long term, a drop from the planned 10 trillion yen (RM297.5 billion) it announced last year.
As for EVs, the company has revised its sales target for these heading into 2030, citing a slowdown in the demand for EVs within the market due to several factors, including changes in environmental regulations as well as trade policies of various countries. The automaker said that the ratio for its EVs is now expected to fall below the previously announced target of 30%, with Mibe saying that the contribution from BEVs could be closer to 20%.
This will be offset by a shift in focus towards hybrids in the designated term, with the powertrain set to play a key role in providing the brand with a transition towards its journey to full electric. The push will be made with a host of next-generation hybrid electric vehicle (HEV) models it will introduce to the market from 2027 onwards, with 13 such HEV models to be launched globally from then into the end of the decade.
Aside from the introduction of a lighter, more stable next-gen platform and a new AWD drive unit, the e:HEV system will also feature a host of improvements in its next generation. Advancements will include an expansion of range where the engine operates most efficiently and an increase in the driving efficiency, with fuel economy of the next-generation e:HEV system set to improve by more than 10%.
The automaker is also aiming to reduce the cost of the next-gen hybrid system by more than 30% compared to the e:HEV system seen in current models. It said that it is targeting cost reduction primarily with key components such as batteries and motors through various initiatives. These will include working closer with suppliers in their development, improving production efficiency and harmonising more parts and components in terms of commonality.
The company also revealed that it will develop a new hybrid system for large-size vehicles meant for the North American market, with an aim of introducing it on products to be launched there in the latter half of the decade. Additionally, the new outstretched H mark used for EV models will also be utilised for major next-gen HEV models from 2027.
With the realignment, the automaker said it is looking to increase its global sales volume in 2030 from the current level of 3.6 million units, with HEVs accounting for 2.2 million units and EVs, somewhere in the region of 750,000 units.
Despite this, Mibe pointed out that the brand was not abandoning its EV path, with there being no change in its position that EVs are the optimal solution to achieve carbon neutrality of passenger vehicles. “EV investment hasn’t been abandoned, just pushed back,” he told reporters during the briefing.
The upcoming 0 Series – of which the 0 SUV and Saloon have been revealed – will remain the main pillar of the company’s future EV business, with the first-generation models that will be introduced to the market next year being software defined vehicles (SDVs) tailored to users through ultra-personal optimisation
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