“Honda Shifts Gear: A Strategic Pivot to Hybrid Vehicles”
With a growing number of consumers opting for hybrid vehicles over fully electric cars, automakers are rethinking their development strategies. Among them is Honda, which has reportedly halted plans to produce a large electric SUV for the US market as it reevaluates its electrification strategy.
This decision appears to be linked to the slower-than-expected adoption of electric vehicles in the US market. A recent tax bill passed under the administration of President Donald Trump may also have influenced Honda’s decision, as it removed important incentives for electric vehicles, making them less appealing to price-conscious consumers.
According to Nikkei Asia, the development and component procurement costs for large electric vehicles are significantly higher, mainly due to the size and cost of batteries. Honda seems to have concluded that the financial risks of launching a large electric SUV in the current market are not worth taking, especially with the vehicle originally planned for release in 2027.
The now-canceled Honda SUV was expected to complete the brand’s electric vehicle lineup. Honda currently has a mid-size electric SUV and a sedan, both of which have been introduced in near-final form. The company still plans to launch these two vehicles from the 0 Series in the US market in 2026.
Previously, Honda aimed to introduce seven new electric vehicles in the US by 2030. However, this goal has now become less certain.
In May 2025, Honda announced a reduction in its electrification investment budget from 10 trillion Yen ($69 billion) to 7 trillion Yen ($48 billion). The company is now prioritizing the development of hybrid vehicles, leading to a scaled-down rollout of electric cars.
From 2027 to 2031, Honda aims to introduce 13 new-generation hybrid models globally, expecting to sell 2.2 million units by 2030. This product line will include a brand-new large SUV designed specifically for the North American market and could be a potential replacement for the canceled electric SUV.
Earlier this year, the Honda Prologue electric SUV witnessed a staggering 963% surge in sales compared to the same period in 2024. However, its total sales stood at only 16,318 units, the lowest among Honda’s offerings in the US market. While exhibiting strong percentage growth, the actual sales figures highlight the challenges still prevalent in the electric vehicle segment.
Of course, Honda is not the only automaker delaying its electric vehicle plans. Nissan has canceled two electric vehicles intended for production in the US, while Ford has paused the development of large electric vehicles. Toyota, on the other hand, has pushed back its plans for a large electric SUV from 2026 to 2028, choosing to focus on gasoline-powered cars.
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