Honda Motor Co. Ltd has slashed its target for electric vehicles comprising 30% of its global sales by 2030, citing a slowdown in the adoption of electric cars, and joining other auto giants such as General Motors and Volvo Cars in scaling back its EV ambitions.
On Tuesday, the Japanese carmaker said it will focus on hybrid cars, and will launch 13 models between 2027 and 2031 as easier environmental regulations and global trade uncertainties have slowed the adoption of electric cars in the developed countries.
“Honda is reassessing its EV strategy and roadmap, including plans for the EV product lineup and the timing of relevant investments,” Honda president and global CEO Toshihiro Mibe said at a press conference. Mibe said it’s hard to read the market, but the company sees EVs accounting for about a fifth of its sales by 2030.
Moreover, the company will also look to cut costs for its next-generation hybrid platforms by more than 50% as compared to the models launched in 2018, and by 30% compared to models launched in 2023.
“There is no change in the Honda position that EVs are the optimal solution to achieve carbon neutrality of passenger vehicles,” Mibe said.
Its worldwide production in 2024 stood at 3,733,602 cars, a 11% decline from 2023. Its exports from India surged 60% to 60,229 units in FY25.
Honda had in December 2024 announced it would launch three cars in the Indian market in FY27. While Mibe spoke about the plan for electric vehicles, the management did not specify how the new strategy will impact its operations in India.
Currently, it offers three models in the country – Amaze compact sedan, City mid-size sedan and Elevate mid-size SUV. It planned to have 5 SUVs in the Indian market by 2030. Currently, it has a hybrid sedan model of Honda City in the country.
India’s rise amid global EV slowdown
While key western markets like Europe and the US have witnessed a slowdown in adoption of electric vehicles, the Indian market has held up well due to a lower base. Electric car sales in the country grew by 20% in 2024 to nearly 100,000 units. However, the penetration of such cars remains low at 2.5%, presenting scope for expansion.
Several global auto giants have in the last one year delayed or cut back investments in the electric vehicle segment. General Motors, Volvo Cars, and Aston Martin are among those that have scaled back their ambitions for EVs.
Previously, Tata Motors had also cited the slowing EV adoption in the US and European market and suggested that it may consider extending the life of its internal combustion engine models for JLR during an analyst meeting in March.
Carmakers are increasingly of the belief that transition to clean fuel cars will have to happen through multiple powertrain solutions, rather than just pure electric vehicles.
“Many players had set some unrealistic expectations regarding transition to EVs in a short period, which is why there is some disappointment about the pace of adoption,” Vikram Pawah, president and chief executive, BMW Group India, told Mint in an interview in April.
Hyundai Motor announced last week that it will also introduce a hybrid model in India.
“We feel that in India, all kinds of technologies have a space. One solution cannot work and we need to leverage all kinds of technologies to reach the carbon neutrality goal,” Tarun Garg, chief operating officer at Hyundai Motor India, said at a media briefing.
Analysts also expect the focus of original equipment manufacturers (OEMs) to shift away from an aggressive, pure electric vehicle expansion globally.
“With expectations of reduced subsidy for EV in the US and extension of meeting carbon dioxide (C02) emission regulations in the EU, most OEMs are refocused on their ICE product pipeline but still expect BEV penetration to increase,” analysts at Elara Capital said in a 18 March note.
