Pivoting to Hybrids: Honda Scales Back EV Targets, Bets Big on Next-Gen HEVs to Anchor Global Growth Through 2030
20 May 2025 | 1324 Views | By Autocar Professional Bureau
Honda Motor Co., Ltd. will roll out 13 next-generation hybrid electric vehicle (HEV) models globally starting in 2027, aiming for 2.2 million units in sales by 2030, Global CEO Toshihiro Mibe announced on Tuesday. With electric vehicle (EV) demand slowing, the Japanese automaker is pivoting to HEVs as the backbone ...
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Honda Motor Co., Ltd. will roll out 13 next-generation hybrid electric vehicle (HEV) models globally starting in 2027, aiming for 2.2 million units in sales by 2030, Global CEO Toshihiro Mibe announced on Tuesday. With electric vehicle (EV) demand slowing, the Japanese automaker is pivoting to HEVs as the backbone of its electrification strategy, scaling back its earlier 30% EV sales ratio target for 2030 to focus on hybrids and advanced driver-assistance systems (ADAS) to capture market share in a volatile industry.
Hybrids Power Honda’s Strategy
Honda’s ambitious HEV push responds to a global EV market slowdown driven by shifting regulations and trade policies. The 13 new HEV models, powered by the advanced e:HEV hybrid system, will deliver over 10% improved fuel economy and a driving experience Mibe described as “high-quality, exhilarating, and resonating with all of the driver’s senses.” Targeting 2.2 million HEV units within a total sales goal of exceeding 3.6 million vehicles by 2030, Honda aims to leverage strong hybrid demand, particularly in cost-sensitive markets like India
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To enhance affordability, Honda is slashing next-generation hybrid system costs by 50% compared to 2018 models through supplier collaborations, production efficiencies, and component standardization. In North America, where large vehicles dominate, Honda is developing a hybrid system for SUVs and trucks, combining high towing capacity with environmental performance, tailored for robust demand.
Intelligent Technologies Bolster Competitiveness
Honda is integrating next-generation ADAS into its HEV and EV lineup, enabling acceleration and steering assistance across urban and highway routes. Leveraging its “Man Maximum, Machine Minimum” design, the company will make these systems viable for compact vehicles, broadening access to advanced safety features. By 2027, Honda will deploy ADAS in key models in North America and Japan, while partnering with China’s Momenta Global Limited to adapt the technology for Asia’s complex road conditions, including India’s congested urban centers.
EVs: A Strategic Long-Term Play
Despite revising its EV sales target downward, Honda remains committed to EVs for carbon neutrality by 2050. The Honda 0 Series, launching in 2026, will introduce software-defined vehicles (SDVs) with “ultra-personal optimization” via the ASIMO OS and advanced AD/ADAS. A high-performance system-on-chip, developed with Renesas Electronics, will deliver 2,000 TOPS (Sparse) AI performance. Honda has cut its electrification investment from 10 trillion to 7 trillion yen through FY2031, delaying projects like a Canadian EV value chain to align with market trends.
Motorcycle Business Fuels Growth
With 20.57 million units sold in FY2025, Honda's motorcycle division holds a 40% global market share and aims for 50% by FY2031. In India, the world’s largest motorcycle market, Honda is expanding electric models like Active e: and CUV e:, with a dedicated electric motorcycle plant set for 2028, aligning with regional sustainability goals.
Financial Discipline and Resilience
Honda projects over 12 trillion yen in cash generation by FY2031, driven by HEV and motorcycle sales. The reduced electrification investment supports HEV production while maintaining shareholder returns of over 1.6 trillion yen, bolstered by a new dividend on equity ratio (DOE). Flexible production lines for EVs and HEVs and a “local production for local consumption” supply chain ensure adaptability to market shifts.
A New Symbol of Transformation
A new “H mark” logo will debut on EV and major HEV models from 2027, symbolizing Honda’s vision for intelligent, electrified mobility.
With 13 new HEV models and a 2.2-million-unit sales target, Honda is positioning itself to lead in hybrids while preparing for an EV future, delivering sustainable mobility solutions tailored to global markets like India.