TOKYO, Japan – Honda Motor Co., Ltd. announced a significant realignment of its automobile business strategy, adapting to recent shifts in the electric vehicle (EV) market and an increasingly uncertain global business environment. Global CEO Toshihiro Mibe outlined a renewed focus on enhancing competitiveness through intelligent technologies and strengthening its business foundation by reassessing its powertrain portfolio, particularly emphasizing Hybrid Electric Vehicles (HEVs).
While Honda remains committed to achieving carbon neutrality by 2050, the company acknowledges a slowdown in EV market expansion due to changing environmental regulations and trade policies. Consequently, Honda’s global EV sales ratio in 2030 is now projected to fall below the previously announced 30% target. In response, Honda will position next-generation HEVs, set for introduction from 2027 onwards, as a key transitional powertrain. The company aims to increase total automobile sales to over 3.6 million units by 2030, with HEVs accounting for a core target of 2.2 million units.
A central pillar of this revised strategy is the significant enhancement of intelligent technologies, with a core focus on independently developing next-generation Advanced Driver-Assistance Systems (ADAS). This advanced ADAS will assist drivers with vehicle operations like acceleration and steering throughout entire routes, including complex urban environments. Leveraging its “Man Maximum, Machine Minimum” (M/M) concept for car design, Honda plans to widely apply this ADAS to key EV and HEV models in North America and Japan around 2027, making high-value features more accessible and affordable. In China, Honda will collaborate with Momenta Global Limited to develop ADAS optimized for local road conditions, to be installed in all future models launched there.
Honda’s two-motor e:HEV hybrid system will undergo further advancements, aiming for world-leading efficiency and over 10% improvement in fuel economy for next-generation models. Coupled with new lightweight platforms and electric AWD units, this promises an exhilarating driving experience. To boost cost competitiveness, Honda is targeting a reduction in next-generation hybrid system costs by over 50% compared to 2018 models and over 30% compared to 2023 models, achieved through supplier co-creation and production efficiency. A new hybrid system for large-size vehicles, targeting the North American market, is also in development for the latter half of the 2020s. Globally, 13 new-generation HEV models will be launched over four years starting in 2027.
While the EV sales ratio target has been adjusted, Honda’s conviction that EVs are the optimal long-term solution for carbon neutrality remains unchanged. The company will continue preparations for the future EV shift. The “Honda 0 Series,” slated for introduction next year, will be a cornerstone of its EV business, offering “ultra-personal optimization” through ASIMO OS and advanced AD/ADAS functions, with future models featuring a Centralized E&E Architecture and a high-performance SoC co-developed with Renesas Electronics. As a symbol of this transformation, a new “H mark” will adorn both EV models and major HEV models from 2027 onwards.
Financially, Honda plans to reduce its previously announced 10 trillion yen investment in electrification to 7 trillion yen through fiscal year 2031, primarily by postponing a comprehensive EV value chain project in Canada and adjusting EV production plant timing. This recalibrated resource allocation aims to generate over 12 trillion yen in cash by fiscal year 2031, enabling both future growth and stable shareholder returns.
In its motorcycle business, Honda reported record unit sales of 20.57 million for the fiscal year ended March 31, 2025, capturing approximately 40% of the global market. With demand expected to grow to 60 million units by 2030, particularly in the “Global South,” Honda aims to achieve a 50% market share and over 15% return on sales by fiscal year 2031 through attractive products, optimized supply, and accelerated electrification. Electric commuter models like CUV e: and ICON e: are already on sale in Southeast Asia and will expand to Europe and Japan, with a dedicated electric motorcycle plant in India becoming operational in 2028.