By Kosaku Narioka
Honda Motor plans to reduce its investment in electric vehicles by more than $20 billion in the coming years as EV demand growth slows.
The Japanese automaker said Tuesday that it will invest 7 trillion yen, equivalent to $48.32 billion, to realize its electrification strategy, down from the Y10 trillion it previously planned for the decade ending March 2031.
Last week, Honda said it would postpone by about two years an $11 billion EV manufacturing project in Canada, citing weaker-than-expected EV sales. The company is also reviewing its timing for the construction of dedicated EV plants, it said.
Honda said there was no change in its position that EVs are the best option to achieve carbon neutrality for passenger vehicles in the long run, but said it expected hybrid vehicles to play a key role during the transition period. The carmaker said it would improve its lineup of hybrid models.
The Japanese company has benefited from a shift among consumers in the U.S. and some other markets to hybrid cars from fully electric vehicles amid concerns about charging problems and higher prices associated with pure EVs.
Honda said it would strive to increase total car sales volume for 2030 to above the current level of 3.6 million units, while targeting hybrid sales of 2.2 million units. Honda said it is likely to undershoot its previously announced EV sales target ratio of 30% in 2030.
The company said uncertainty in the business environment has been increasing due to changes in the trade policies of various countries and the slowdown in EV demand growth, due partly to changes in environmental regulations.
In China, where vehicle electrification is taking hold faster than other countries, Honda said it would work with local autonomous-driving startup Momenta Global to develop and implement driver-assistance systems suitable for road conditions there.
Write to Kosaku Narioka at kosaku.narioka@wsj.com
(END) Dow Jones Newswires
May 20, 2025 05:53 ET (09:53 GMT)
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