Honda said Tuesday electric vehicle sales were slowing in the U.S., prompting the Japanese automaker to scrap its previous goal for EVs to be 30 per cent of its global vehicle sales by 2030.
Instead of the initial plan to invest 10 trillion yen (US$69 billion) in an electrification strategy through the fiscal year ending in 2031, Honda is reducing that investment by three trillion yen ($21 billion) to 7 trillion yen (US$48 billion).
Honda Motor Co. Chief Executive Toshihiro Mibe called the decisions “a switch in the planned course,” while stressing the long-term shift toward electrification remained unchanged, just pushed back in time.
Mibe didn’t mention U.S. President Donald Trump. But Trump’s policies on tariffs, as well as his lack of enthusiasm for electric vehicles, have Japanese automakers scrambling to adapt.
“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 the EV market due to several factors, including changes in environmental regulations,” Honda said in a statement.
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Mibe did not give a specific timeline for a new course for electrification. But Honda, which makes the Civic and Accord car models, will be more aggressive in producing hybrids instead, he said.
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Honda’s auto plant in Marysville, Ohio, for instance, will be adapted to produce both EVs and hybrids under the new plan.
Mibe pointed to Honda’s motorcycle business as its core strength, as sales continue to grow in India, and Honda’s global market share was steadily rising.
Mibe also said the Tokyo-based automaker was working on the use of various digital technology to strengthen safety, including assisted driving that will bring deaths from traffic accidents down to zero, a longtime Honda goal.
Talks that began late last year to bring together the operations of Honda and Japanese rival Nissan Motor Corp., as well as smaller automaker Mitsubishi Motors Corp., in a merger, collapsed earlier this year. Mibe told reporters talks were still ongoing to have the three automakers work together on developing technology. He remained vague and did not say when a deal might be reached.
Nissan is sinking into losses, reducing its work force and shuttering plants. Its new chief executive, Ivan Espinosa, is promising a turnaround by speeding up decision-making.
Honda’s profit for the fiscal year through March slipped 24.5 per cent from the previous year. But much of the negative impact is from external factors like tariffs and sliding sales in China.
“Honda’s profitability outlook remains robust, supported by cost-cutting initiatives,” said Aaron Ho, equity analyst at CFRA Research.
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