Honda's CEO Is Focused on Hybrids as EV Adoption Is Delayed by ‘5-6 Years’

      Honda

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      Honda CEO Toshihiro Mibe is recalibrating the company's strategy after recent developments have significantly impacted the global perspective on combustion and electric vehicles. During the annual business briefing, Mibe explained the reasons behind reducing Honda's global EV sales projections, while predicting a doubling of hybrid sales by 2027.

      Last year, Honda anticipated selling around 2 million EVs over the next two years. This revised estimate now ranges from approximately 700,000 to 750,000 units. Automotive News reports that hybrid sales could soar to over 2 million during the same period.

      “It has become increasingly evident that environmental regulations, which initially promised to accelerate EV adoption, are being relaxed, particularly in the U.S. and Europe,” Mibe stated. “Additionally, changes in trade policies across various countries are contributing to an increasingly uncertain business environment."

      “If the timeline for EV adoption is delayed, I anticipate it will be postponed by about five years, especially in North America,” Mibe noted. “With the Trump administration remaining in power for another four years, it doesn't imply that demand for EVs will rebound right away. I project a delay of about five to six years."

      While Mibe's insights are valuable, they are not particularly surprising. Automakers globally remain committed to, and thus persistent in, EV production and sales. However, they are all revising their initial forecasts, which many analysts deemed overly optimistic. It seems the current landscape acts as a reset, shifting focus to hybrids and PHEVs as a transitional phase to EVs.

      It is important to highlight that Mibe's reference to the Trump administration's approach to EVs supports what Honda’s former electrification chief, Shinji Aoyama, and American Honda President and CEO, Kazuhiro Takizawa, shared with The Drive last August. When asked about the potential impact of a second Trump term on the company’s EV strategies, Aoyama indicated that Honda was prepared for such an outcome and that it wouldn't come as a shock. He also hinted that the progression of EV development would persist, albeit at a slower pace due to the political climate.

      Mibe's assertion that EV demand will eventually rebound aligns with the company's long-term perspective, first communicated to us regarding 2024.

      “Conversely, while there is a slowdown in the shift toward EVs, demand for hybrid-electric vehicles is rising,” Mibe remarked. “Ultimately, the value of battery-electric vehicles has not yet reached or surpassed that of existing hybrid or plug-in hybrid vehicles. This is the primary reason consumers have not fully embraced EVs yet.”

      Honda has a long-standing commitment to hybrids, but it has significantly ramped up its involvement in this segment recently. Its racing initiatives in North America also focus on hybrid models, including participation in the IndyCar series and IMSA under the Acura brand. This weekend's Indy 500 is being promoted as the first hybrid race in its history, an endeavor that Honda is keenly committed to from a marketing angle.

      In contrast, rival Toyota's approach to EVs and hybrids differs significantly from Honda’s; however, both companies agree that maintaining a balanced vehicle portfolio is essential for navigating the current market landscape. Both Honda and Toyota will persist in investing in EVs, but it is evident that the pace will differ from earlier expectations.

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