In a decisive move to adapt to the evolving global auto landscape, Honda Motor Co., Ltd. has unveiled a major realignment of its automobile electrification strategy. At the company’s 2025 Business Briefing, Global CEO Toshihiro Mibe detailed the roadmap ahead, emphasizing a strengthened focus on intelligent technologies and hybrid vehicles (HEVs), amid global headwinds affecting electric vehicle (EV) adoption.
Navigating Market Headwinds
Mibe acknowledged that while Honda remains committed to achieving carbon neutrality and zero traffic fatalities by 2050, recent shifts in global trade policies, regulatory frameworks, and EV market growth have prompted a reassessment of the company’s near-term goals. Honda now anticipates its global EV sales ratio in 2030 to fall below the previously announced 30% target.
In response, the company is repositioning HEVs as a strategic bridge during the transition to full electrification. Honda plans to launch 13 next-generation hybrid models globally between 2027 and 2031, aiming for 2.2 million HEV units annually by 2030—making hybrids the backbone of its future portfolio.
Smart Mobility at the Core
Central to Honda’s renewed vision is the development and broad application of next-generation Advanced Driver Assistance Systems (ADAS). Designed to assist drivers across both highways and urban streets, this next-gen ADAS will debut in key EV and HEV models in North America and Japan starting in 2027. With support from Chinese tech firm Momenta, Honda will also launch a China-specific ADAS system tailored to the country’s unique road environments.
Revving Up the Hybrid Game
Honda’s acclaimed e:HEV two-motor hybrid system is undergoing significant upgrades to achieve more than 10% improvement in fuel efficiency and a 50% cost reduction compared to its 2018 counterpart. The company is also developing new hybrid systems for large-size vehicles in response to sustained North American demand for spacious models.
Electric Dreams, Long-Term Vision
While Honda is tempering its short-term EV goals, it remains committed to the Honda 0 Series, with first-generation models arriving in 2026. These software-defined vehicles (SDVs) will be powered by the advanced ASIMO OS and Centralized E&E Architecture, offering high-performance AD/ADAS capabilities. A co-developed AI system-on-chip with Renesas Electronics promises industry-leading AI performance of 2,000 TOPS.
Motorcycle Momentum
On the two-wheeler front, Honda continues to dominate, recording 20.57 million motorcycle units sold in FY2024-25. With the motorcycle market projected to grow to 60 million units globally by 2030, Honda aims to capture 50% global market share and achieve a return on sales (ROS) exceeding 15% by FY2031. Its electric motorcycle range is expanding rapidly, with new models like Active e:, QC1, and CUV e: rolling out across Asia and Europe.
Financial Realignment
Reflecting the market’s shifting dynamics, Honda announced a 3 trillion yen reduction in its planned 10 trillion yen electrification investment, postponing major EV infrastructure projects in Canada. The revised strategy includes generating over 12 trillion yen in cash and maintaining 1.6 trillion yen in shareholder returns by FY2031.
In a notable step, Honda introduced Dividend on Equity (DOE) as a new benchmark for shareholder returns, underlining its commitment to balancing growth with investor value. With a pragmatic yet ambitious approach, Honda’s realigned strategy repositions the automaker to lead in both the hybrid and intelligent mobility segments, while laying the groundwork for a resilient transition into an electrified future.
