Honda Motor is recalibrating its electrification strategy in response to changing market conditions, announcing a significant reduction in its electric vehicle investments while doubling down on hybrid technology and AI integration.
CEO Toshihiro Mibe revealed on Tuesday that the automaker has decreased its projected investment in electrification and software through 2030 from 10 trillion yen to 7 trillion yen ($48.4 billion). "Based on the current market slowdown, we expect EV sales in 2030 to fall below the 30% that we previously targeted," Mibe stated, adding that electric cars might make up only around 20% of the company's sales by the end of the decade.
The company plans to sell 2.2 million to 2.3 million hybrid vehicles by 2030 and will launch 13 next-generation hybrid models globally from 2027 to 2030. Honda is also developing a hybrid system for larger models to debut in the latter half of the decade. This strategic pivot comes as hybrid-electric models now represent over 25% of Honda brand sales in the United States.
Despite scaling back EV investments, Honda maintains that "EVs are the optimal solution to achieve carbon neutrality of passenger vehicles." The company will proceed with its Honda 0 Series as planned, with the first models scheduled for production in 2026 at Honda's Ohio EV hub.
The Honda 0 Series will showcase specific technologies that contribute to the "Wise" value of these models, including highly reliable automated driving technologies and "ultra-personal optimization" through the ASIMO OS. As a software platform, ASIMO OS will apply integrated management of electronic control units for vehicle systems such as automated driving/advanced driver assistance systems and in-vehicle infotainment. Through over-the-air updates, functions and services will be continuously advanced according to individual user preferences, enhancing both the digital user experience and integrated dynamics controls.
Honda will install the ASIMO OS in Honda 0 Series models scheduled for global launch starting in 2026. The system will serve as the foundation for automated driving, advanced driver assistance systems, integrated dynamics control for enhanced driving experience, and digital user experience that creates new value for vehicles as a "space" for users.
The AI system, built with Helm.ai's machine-learning technology, adapts to new driving conditions and will expand autonomous capabilities through updates. Honda envisions reducing collisions and enabling drivers to multitask during trips, with future developments including AI-driven behavior modeling to handle complex road scenarios, such as unexpected obstacles or yielding to pedestrians.