Honda reshapes electrification strategy amidst market shifts
Despite external challenges, Honda remains committed to its long-term vision of carbon neutrality and zero traffic fatalities by 2050. The Japanese automaker continues to view electric vehicles (EVs) as the most viable pathway to decarbonising mobility. However, in light of regulatory changes and uncertain global trade conditions, Honda is adapting its strategy to ensure sustained competitiveness and broader accessibility to its mobility innovations.
Reassessing Priorities in a Shifting Market
Mibe confirmed that Honda would intensify its efforts in two key areas: the advancement of intelligent technologies across its EV and hybrid electric vehicle (HEV) lineups, and a comprehensive review of its powertrain portfolio. This dual focus aims to strengthen the brand's foundations while maintaining its innovation momentum.
Although Honda previously set a target for EVs to comprise 30% of global vehicle sales by 2030, this projection has now been revised downward due to a softening in EV demand. Simultaneously, HEVs continue to gain popularity, prompting Honda to place greater emphasis on this transitional technology.
The company intends to elevate HEVs, particularly next-generation models arriving from 2027 onward, as pivotal products during the shift to full electrification. By 2030, Honda is targeting sales of 2.2 million HEVs as part of a broader effort to surpass its current annual global vehicle sales figure of 3.6 million units.
Intelligent Driving Through Next-Generation ADAS
At the heart of Honda's strategy is the development of a proprietary next-generation advanced driver-assistance system (ADAS), designed to offer seamless driver support across varied road environments. The system will guide vehicles from origin to destination, covering both highways and urban settings, based on the driver's navigation inputs.
Urban deployment presents significant technical challenges, but Honda is leveraging insights from its autonomous driving research to develop robust solutions. This advanced ADAS will begin appearing in EV and HEV models launched in Japan and North America around 2027.
While such technologies have been largely reserved for high-end EVs and plug-in hybrids due to energy and cooling demands, Honda's refined full-hybrid systems overcome these limitations through precise energy management and compact component design. These efficiencies also enable the integration of ADAS into smaller vehicles without sacrificing cabin space, an achievement guided by Honda's longstanding 'man-maximum, machine-minimum' philosophy.
In China, where both electrification and automation are advancing rapidly, Honda is collaborating with local firm Momenta Global Limited to tailor its next-generation ADAS to regional road conditions. The technology will be standard on all future Honda models in the Chinese market.
Bolstering Hybrid Leadership with e:HEV Advancements
Honda is also doubling down on the evolution of its e:HEV hybrid systems, striving to make them the most efficient in the world. Enhancements will include broader operating ranges for internal combustion engines, improved hybrid unit performance, and the introduction of a new electric all-wheel-drive (AWD) system offering greater responsiveness and control.
The company anticipates a more than 10% improvement in fuel efficiency for upcoming e:HEV models, while also delivering a uniquely engaging and refined driving experience. To further lower costs, Honda is working closely with suppliers to cut the price of its next-generation hybrid systems by over 50% compared to those launched in 2018, and by 30% relative to current 2023 systems.
Particular attention is being paid to North America, where demand remains strong for spacious, large-format vehicles. Honda is developing a robust hybrid powertrain for this segment, promising strong performance, high towing capacity, and strong environmental credentials. This system is expected to debut in the latter half of the decade.
To capitalise on rising HEV demand, Honda will introduce 13 new hybrid models globally between 2027 and 2031, expanding its portfolio to meet market needs.
Preparing for the EV Era with the Honda 0 Series
While short-term projections for EV adoption have been tempered, Honda continues to prepare for a fully electric future. Central to this effort is the Honda 0 Series, which will debut its first-generation models in 2026. These smart digital vehicles (SDVs) will offer customisable user experiences powered by Honda's proprietary ASIMO OS and advanced driver-assist systems showcased at CES 2025.
These EVs will incorporate a new centralised electronic and electrical (E&E) architecture and utilise a high-performance system-on-chip (SoC) developed in collaboration with Renesas Electronics. The chip will deliver industry-leading artificial intelligence capabilities of 2,000 TOPS (Tera Operations Per Second), promising greater levels of vehicle intelligence and performance.
Despite delays in certain investment timelines, such as the development of an EV value chain in Canada, Honda affirmed its unwavering belief in EVs as the cornerstone of future mobility. The company aims to build a strong and resilient EV brand while remaining flexible with its rollout strategy to match market conditions.
A New Era of Honda Mobility
Honda's realigned strategy reflects a broader commitment to innovation, adaptability, and sustainable growth. The company envisions a future where drivers can choose between dynamic, hands-on driving and relaxed, autonomous commuting, all within the same vehicle.
To symbolise this transformation, Honda will debut a redesigned 'H' badge across both EV and key HEV models, marking a bold new chapter for the brand as it evolves toward a smarter, cleaner, and more connected future.
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