Honda to focus on hybrid cars amid slowdown in EV demand

The first-gen O series EV models will launch in the market next year.

Japanese carmaker Honda has decided to make changes to its EV strategy due to slowing demand globally for electric vehicles. This was announced by Global CEO Toshihiro Mibe during the 2025 Honda Business Briefing.

Honda said that its global sales ratio in 2030 is expected to fall below the 30 percent mark, a figure it had previously announced. On the other hand, the demand for models is high. Hence, Honda will launch new hybrid models to the market from 2027 onwards. These new models will play a key role during the transition period toward the popularization of EVs and further enhance its HEV lineup.  With the steady execution of this realignment, by 2030, Honda will strive to increase total automobile sales volume to above the current level of 3.6 million units, with a HEV sales target of 2.2 million units at the core.

Honda is also working on advancing its original two-motor hybrid system, e:HEV hybrid system, and platforms in all aspects. This will power the upcoming models. The new system will be combined with a next-generation platform and a newly-developed electric AWD drive unit. Honda will also work on improving the fuel efficiency of the next-gen e:HEV model by 10 percent.

Honda’s other focus is to reduce costs with key components such as batteries and motors with various initiatives, including co-creation activities with suppliers, further improvement of production efficiency and commonization of more parts and components. The carmaker aims to reduce the cost of the next-gen hybrid system by more than 50 percent compared to the hybrid system installed in models introduced in 2018, and by more than 30% compared to the hybrid system introduced in 2023 in current models.

For North America, where hybrids are very popular, Honda will develop a hybrid system for large-sized vehicles, featuring powerful driving performance and high towing capability. The carmaker aims to add this system to models that will launch in the second half of the current decade.

Honda is also working on its next-generation ADAS systems, which assist the driver with vehicle operations like acceleration and steering throughout the entire driving route, whether on expressways or surface roads, to the destination the driver inputs on the navigation system. The next-gen ADAS will feature in EV and HEV models that Honda will launch in North America and Japan around 2027.

Honda will launch 13 next-generation HEV models globally, over four years starting in 2027. The first-gen O series EV models will launch in the market next year. Both EVs and HEVs will feature the new ‘H mark’ 2027 onwards, symbolizing Honda’s transformation of its automobile business.