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News - HondaHonda to slash BEV budgetJapanese manufacturer Honda to shift focus towards hybrid models, helping it cut costs21 May 2025 HONDA is the latest major global automotive manufacturer to put the brakes on battery electric vehicle (BEV) development, cutting spending in response to slower than expected uptake growth.
Speaking at a business briefing in Tokyo last week, Honda director, president, and representative executive officer Toshihiro Mibe said the company was re-evaluating its BEV plan “postponing” ¥3.0 trillion (approximately $A32 billion) out of a previously allocated ¥10 trillion expenditure on BEV development up to 2030.
He said this was “based on (Honda's) decision to postpone the project to establish a comprehensive EV value chain in Canada and change the timing to construct dedicated EV production plants”.
“For small-size mobility products including passenger vehicles, Honda believes that electric vehicles are the optimal solution for achieving carbon neutrality from a long-term perspective. Based on this belief, Honda made the strategic decision to make a major shift toward the popularisation of EVs and has been making progress with various initiatives.”
Mr Mibe said Honda will improve profitability through expansion of its motorcycle business, cost reductions the adoption of next-generation e:HEV (hybrid) systems and platforms for its car-making division, an increase in e:HEV model sales and making progress toward targeted 10 per cent company-wide return on invested capital for the Japanese fiscal year ending March 31, 2031.
While shifting focus back toward its e:HEV technology, Honda will keep developing “intelligent mobility” and carbon neutrality for all products and corporate activities.
The company is now targeting 100 per cent electrified passenger vehicle sales by 2040 and carbon neutrality by 2050.
Honda says it also remains in discussions with various countries and other manufacturers, including the proposed alliances with Nissan and Mitsubishi.
But BEV sales targets were falling behind, “necessitating a realignment of Honda’s automotive strategy that places more emphasis on new generation, lower cost and more efficient hybrid technology along with a greater focus on the North American, Japanese and Chinese markets,” said Mr Mibe.
“We have new generation of low-cost HEV products coming in 2027 that will give Honda a wider range of models and will help us achieve 2.2 million HEV sales in 2030,” he added.
In addition to targeting greater battery efficiency and a 50 per cent cut to manufacturing costs, the company’s new e:HEV systems will be lighter, with more parts commonality between models.
The new-generation e:HEV technology replaces the version Honda introduced in 2019 and will be applied across a wider range of vehicles including larger models destined for the US market, as well as entry level and lifestyle models.
Honda says it is a further advancement of the company’s original two-motor hybrid system and platforms.
Both small-size and mid-size e:HEV systems will gain efficiency and greater range through various optimisations and the use of a next-generation platform which Honda claims will boost driving stability and contribute to further weight reductions
Also in the pipeline is a new electric all-wheel drive unit that enables more precise and responsive motor control plus an expected 10 per cent fuel economy improvement.
“Honda will bring 13 new HEV models to market by 2027 and will strive to build a new EV brand featuring our new ‘H’ mark logo,” continued Mr Mibe.
“In the meantime, the environment surrounding the automobile industry is changing day by day.
“Uncertainty in the business environment is increasing, due particularly to the slowdown in the expansion of EV the market due to several factors, including changes in environmental regulations, which had been the premise for the widespread adoption of EVs, as well as changes in trade policies of various countries.
“In order to maintain its competitiveness in such a business environment and continue to help and inspire people through its mobility products and services, Honda must create new value not only through electrification but also with enhanced application of intelligent and then offer such value to a broader range of customers in more accessible and affordable ways.”
In conjunction Honda’s environmental aspirations with new gen e:HEVs, Honda is in partnership with Chinese company Momenta to develop next-generation advanced driver assist systems (ADAS) that it hopes will result in zero traffic collision fatalities by 2050.  Read more4th of December 2024  Honda updates Civic range for 2025Civic e:HEV L joins Honda’s all-hybrid small car line-up priced from $49,900 drive-away11th of October 2024  Honda talks ‘thin, light, wise’ BEVsOnce deep in Japan’s electric car lag, Honda now claims to have a BEV bloat antidote11th of September 2024  Honda sharpens pencil on HR-V, adds new variantNew hybrid variant added to lower priced, feature-enhanced Honda HR-V range |
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