Honda announces a significant reduction in EV investment

Honda announced on May 20 that it will adjust its pure electric vehicle (EV) strategy. It originally planned to invest 10 trillion yen in pure electric vehicles and software development by 2030, but this time it said it would significantly reduce it by 30% to 7 trillion yen. The Trump administration in the United States is launching a policy to re-evaluate the pure electric vehicle support program. Honda believes that the popularity of pure electric vehicles is slower than expected, and there are risks in huge investments.

Honda’s president Toshihiro Mibe said that the proportion of pure electric vehicles in car sales by 2030 will be revised, and it is expected to be adjusted from the previous 40% to less than 30%. Honda originally proposed a sales target of more than 2 million vehicles in 2030, but this time it was significantly reduced to 700,000 to 750,000 vehicles (based on sales).

The pure electric vehicle and battery factory planned to be built in Canada will be postponed for 2 years. It was originally planned to invest 15 billion Canadian dollars and put it into operation in 2028, but this time it was postponed to after 2030. Whether to restart investment will be decided based on the situation two years later.

Through a series of strategic adjustments, the investment in pure electric vehicles by 2030 will be significantly reduced from 10 trillion yen to 7 trillion yen. The goal of “de-gasoline” to make pure electric vehicles and fuel cell vehicles (FCV) account for 100% of global new car sales by 2040 will continue.

On the other hand, by 2030, global sales of hybrid vehicles (HV) will increase to more than twice the current level, reaching 2.2 million units. In the four years starting from 2027, 13 HVs will be launched globally.

The motorcycle business, which is the main source of profit, strives to increase its global market share from the current 40% to more than 50% in the medium and long term. By 2030, profitability will be improved through advantageous motorcycles and HVs with strong demand, buying time before pure electric vehicles become popular.

President Mibe said that “the brakes for the transition to pure electric vehicles have been stepped on.” He also emphasized that “we will build an automotive business that takes into account both future preparations and profitability improvements, and at the same time, combine the strong profitability of the motorcycle business to continue to pursue growth in an opaque situation.”