Honda scales back EV plans, to focus on hybrid cars

Chintan Mehta

21 May 2025, 03:30 PM

3 Mins read

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Honda is reducing its electric vehicle plans worldwide and focusing on hybrid cars and the Indian two-wheeler community.

Quick Comparison: Honda’s New Strategy (2025)

Category	Previous Focus	Current Focus (2025)
EV Investment	¥10 trillion	¥7 trillion
EV Sales Target (2030)	Over 30% of total sales	Less than 30% of total sales
Hybrid Vehicle Focus	Moderate	Strong (13 new models planned)
Two-Wheeler Focus in India	Moderate	High (new e-bike plant coming 2028)
Long-Term Goal (2040)	All-electric or fuel-cell	Unchanged

Honda Motor Company has recently said it will decrease its global EV investments and move more toward making hybrid vehicles and electric two-wheelers for customers in India. Currently, Toyota plans to allocate ¥7 trillion ($48.3 billion) for electrification through 2030-31, a 30% reduction from its earlier plan of ¥10 trillion.

During the 2025 Business Briefing, President and CEO Toshihiro Mibe blamed slower demand for electric vehicles around the world as the main cause for the change. “We are adjusting our investment to match the pace of market evolution while maintaining our long-term goal of carbon neutrality,” said Mibe.

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EVs Should Represent Under 30% of All Cars Sold by 2030

Original expectations were for battery electric vehicles to account for more than 30% of its car sales by 2030, but they are now expected to make up less. Even so, the company targets total vehicle sales to remain above the present figure of 3.6 million, while 2.2 million of those vehicles will be HEVs by 2030.

Greater Promotion of Hybrids and Motivated In-House Innovation

The brand is committed to releasing 13 new hybrid cars around the world between 2027 and 2031, as well as improving how efficient fuel is used and lowering costs for hybrid systems by more than half since 2018. The company is also making progress in creating its own battery technology, new vehicle dynamics software and an advanced driver help system for roads.

As raw material costs go up and more EV charging points are needed in main locations, automakers are choosing this approach.

Electric Two-Wheelers Keep Top Priority in India

Honda gives priority to finding electric solutions in India, its biggest market for two-wheelers. Back in FY25, India made up 5.3 million of Honda’s 20.5 million motorcycle sales worldwide or more than a quarter of the total.

The company will build a specialized electric motorcycle plant in Karnataka and aims to start operating it by 2028. The factory will help produce both the new Activa e: and the brand-new QC1, strengthening Honda’s plan to increase its presence in the growth electric scooter and bike business.

“Our plant in Karnataka will significantly strengthen our electric motorcycle business structure and help us meet future demand in India and other markets,” Mibe stated.

Canadian EV project has been paused, but talks with Nissan and Mitsubishi are continuing

Last week, Honda decided to put its C$15 billion ($10.7 billion) EV plant project in Ontario, Canada on hold because demand for cars and SUVs was cooling in North America. Still, the company restated its commitment to selling only electric or hydrogen vehicles by 2040.

Talks with Nissan and Mitsubishi about joining forces are going on, but none of the outcomes or timings have been shared publicly yet.

Industry Context

In addition to Tesla, other car manufacturers around the world have changed their electric vehicle objectives due to changes in the market, trouble with the supply chain and inadequate charging infrastructure.

While Honda is taking a more restrained approach this year, its ambition to electrify remains strong. Industry experts believe the hybrid-first choice could provide customers in places with few EV charging stations an adaption waypoint between old and new types of vehicles.

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