Honda Recalibrates EV Strategy; Plans 13 New Hybrid Vehicle Launches

Facing a fast-changing global auto industry, Honda is steering its future in a bold new direction. Recently, Toshihiro Mibe, the Global CEO of Honda Motor Co., unveiled a comprehensive realignment of the company’s automobile electrification strategy. This comes amid slowing EV demand, shifting regulations, and global economic uncertainties that have prompted major automakers to rethink their long-term plans.

While reaffirming its long-term goal of achieving carbon neutrality by 2050, Honda is now broadening its approach, balancing its push for electric vehicles (EVs) with a renewed focus on hybrid electric vehicles (HEVs), advanced driver assistance systems (ADAS), and intelligent technologies. The updated roadmap aims to offer more accessible, affordable, and intelligent mobility solutions to customers worldwide.

A New Reality in the EV Market

Honda’s original vision centered around a bold shift to electric vehicles (EVs), targeting 30 per cent of global sales from EVs by 2030. However, CEO Mibe acknowledged that global EV adoption has slowed due to shifting environmental regulations, changing trade policies, and market uncertainties.

To stay competitive, Honda will now take a dual-track approach, advancing electric (EV) and hybrid electric vehicle (HEV) technologies with equal focus.

Two Key Strategic Directions

• Enhance EV and HEV Competitiveness through Intelligent Technologies
• Reassess Powertrain Portfolio for Market Flexibility

These changes aim to create accessible, high-value mobility products, supported by new intelligent technologies such as advanced driver-assistance systems (ADAS) and smart energy management.

ADAS at the Core of Honda’s Intelligent Future

Honda is developing a next-generation ADAS system that assists drivers with acceleration and steering across city roads and highways, right to their destination. This system, expected to debut around 2027, will offer safe, stress-free driving experiences even in complex urban settings.

Unlike current ADAS, which is mostly limited to luxury EVs, Honda’s efficient hybrid system allows this technology to be extended to smaller, more affordable vehicles, without sacrificing interior space or design.

In China, Honda is working with Momenta Global to localise and enhance ADAS for Chinese road conditions, underscoring the brand’s regional strategy.

Hybrids Take the Lead

With EV growth slowing, Honda is doubling down on HEVs to bridge the gap until EV demand accelerates. Key plans include:

• Launching 13 new HEV models globally between 2027 and 2031
• Setting a sales target of 2.2 million HEV units by 2030, up from current levels
• Improving fuel efficiency of HEVs by over 10 per cent through advances in the e:HEV hybrid system
• Cutting HEV production costs by over 50 per cent compared to 2018 models

For North America, where large SUVs remain popular, Honda is also developing a new high-power hybrid system with strong towing and environmental performance.

Updated EV Plans: Focus on Long-Term Readiness

While Honda remains committed to EVs as the best long-term solution for carbon neutrality, the company is delaying some investments, including the development of an EV value chain in Canada.

That said, Honda will proceed with the Honda 0 Series, beginning in 2026. These EVs will feature:

• ASIMO OS and intelligent features for “ultra-personal optimisation”
• A powerful System-on-Chip (SoC) co-developed with Renesas Electronics, delivering high AI performance (2,000 TOPS)
• Centralised E&E Architecture for more advanced vehicle functions

Honda plans to build a strong EV brand gradually while maintaining cost control.

New Production & Supply Chain Strategy

In anticipation of fluctuations between HEV and EV demand, Honda is creating a flexible, mixed-model production system capable of manufacturing both types. This will reduce risk and improve adaptability.

In line with its “local production for local consumption” principle, Honda is optimising global supply chains for more resilient operations and rapid response to market shifts.

Motorcycle Business: A Key Profit Engine

Honda’s motorcycle division remains a bright spot. In FY'2025, Honda sold 20.57 million units, capturing 40 per cent of the global motorcycle market. With rising demand in India, Southeast Asia, and the Global South, Honda expects the global market to grow to 60 million units by 2030.

Key motorcycle strategies include:

• Rolling out electric models like Active e: and CUV e:
• Opening a dedicated electric motorcycle plant in India by 2028
• Increasing production of flex-fuel and fuel-efficient ICE models

By 2031, Honda aims to capture 50 per cent global motorcycle market share and achieve a Return on Sales (ROS) of over 15 per cent.

Financial Strategy

Honda is reducing its previously announced electrification investment from ¥10 trillion to ¥7 trillion by FY2031, mainly due to the EV market slowdown and project postponements.

At the same time, the company:

• Plans to generate over ¥12 trillion in cash by 2031
• Continues to invest modestly in HEVs
• Commits to ¥1.6 trillion in shareholder returns
• Introduces Dividend on Equity (DOE) to enhance long-term investor value

With solid motorcycle profits and cost-efficient hybrid production, Honda aims to reach a 10 per cent return on invested capital (ROIC) by FY2031.

A New Era Begins

As a symbol of transformation, Honda will unveil a new “H” logo, not just for EVs but also for major hybrid models starting in 2027. Honda is not walking away from electrification. Instead, it is rebalancing its strategy, emphasizing hybrid growth while keeping EV innovation on track.