Automakers Rework EV Plans as Demand Cools, Hybrids Regain Focus

Imported cars parked at the port of Zeebrugge in Belgium. [Photo by Reuters/Yonhap]

Global automakers are revising their strategies as growth in the electric-vehicle market slows. U.S. and Japanese carmakers are increasingly dialing back the pace of EV investment and shifting more attention to hybrids.

According to the industry on the 15th, Japan’s Honda has decided to temporarily suspend its next-generation EV platform strategy, the “Honda 0 Series.” Development has also effectively halted on the flagship sedan “Saloon,” slated for release next year, and the Acura RSX sport utility vehicle, the report said.

That has clouded Honda’s goal of investing 3.5 trillion yen in EVs by 2030 and switching all new vehicles to electric and hydrogen models by 2040.

Honda’s decision reflects rising management burdens. Kyodo News and other foreign media reported Honda’s consolidated operating loss for last year is expected to be as much as 690 billion yen, a sharp reversal from an 835.8 billion yen profit a year earlier. This year, losses are forecast to reach as much as 2.5 trillion yen, the reports said.

U.S. automakers have also posted operating losses tied to EV investment. Ford reported a $4.8 billion operating loss in its EV division last year. GM, while scaling back EV investment, spent about $6 billion to adjust production lines.

Honda is moving to strengthen a hybrid-centered strategy while moderating EV investment. Toyota recently said it plans to increase hybrid production by about 30%, significantly expanding annual output.

The Korea Automotive Technology Institute projected the same trend. In a January report, “Global Automotive Industry Issues to Watch in 2026,” it said the eco-friendly vehicle market should keep growing even as policy uncertainty increases. It said consumers are likely to focus on hybrids, which carry relatively lower risk.

The global EV market has entered a contraction phase, the article said. Last year, the United States temporarily suspended EV tax credits under the Inflation Reduction Act. China ended its purchase-tax exemption policy starting this year and is imposing a tax equal to 5% of an EV’s price. In Europe, there are moves to ease a policy that would ban sales of internal-combustion vehicles starting in 2035.

* This article has been translated by AI.

Oh Jooseok