Honda is changing course after taking a major financial hit tied to its electric vehicle strategy. The Japanese automaker has dropped key long-term EV targets and will now focus more heavily on hybrid SUVs and sedans, with a new generation of ultra-efficient hybrid models planned from 2028.
Honda has canceled its previous goal of having electric vehicles account for 20 percent of its new car sales by 2030. The company has also abandoned its earlier plan to shift entirely to electric and fuel-cell vehicles by 2040.
The move comes after Honda reported its first annual loss in nearly 70 years for the fiscal year ending in March. According to the source report, the company was hit by more than $9 billion in restructuring costs related to its EV business.
Honda CEO Toshihiro Mibe also confirmed that the company has indefinitely suspended its $11 billion EV project in Canada. The site had been planned for both vehicle and battery pack production and would have represented Honda’s largest-ever investment in the country.
The decision reflects a broader reassessment of Honda’s electric strategy, especially as demand, profitability and investment requirements continue to shift across the global EV market.
Honda had invested heavily in its dedicated 0 Series EV platform, which was expected to support loveral future electric models. The initial lineup was set to include the Honda 0 Series SUV, Honda 0 Series Saloon and Acura RSX.
However, all three models have now been canceled before reaching production, according to the source material. Instead of pushing forward with that EV rollout, Honda is redirecting its resources toward hybrid technology.
Honda’s next chapter will begin with two new hybrid models due in 2028. During a business briefing, the company previewed a four-door Honda sedan concept and an Acura-badged crossover concept.
Both vehicles will use a new platform and a next-generation hybrid system. Honda says the powertrain is being developed to be the world’s most efficient and is expected to improve efficiency by more than 10 percent compared with the hybrid technology introduced in 2023.
Honda plans to launch at least 15 models using its new hybrid powertrain by March 2030. The United States will receive most of them, and many are expected to be all-wheel-drive SUVs, reflecting the preferences of American buyers.
The sedan and crossover concepts shown by Honda appear visually related to the canceled 0 Series Saloon and Acura RSX, but their production versions will arrive as hybrids rather than fully electric vehicles.
To support the shift, Honda will invest 4.4 trillion yen, nearly $28 billion at current exchange rates, into new gas and hybrid models over the next three years. Future EV development will receive a much smaller allocation of around $5 billion.
Honda expects its motorcycle business and cost-cutting efforts to help return the company to profitability by the end of the year. For now, the brand’s near-term electrification strategy appears to be centered on hybrids rather than a rapid transition to full EVs.
