Honda has now said it is stopping work on – and will not release – three electric vehicles it had originally intended to build in North America. This decision followed a complete look at the company’s plans for going electric, with EV sales not increasing as quickly as hoped, and its car business facing more money troubles.
The three vehicles involved are the Honda 0 SUV, the Honda 0 Saloon, and the Acura RSX electric crossover; all three were to have been very important to Honda’s future EV range in the United States.
Honda explains the step is a result of large changes in the car market around the world – and especially in America – where people aren’t buying EVs as fast as car makers had thought they would.
Honda states that a mix of reasons made the company need to revise its EV plans. In the U.S., the electric vehicle market’s growth has slowed because of changes to rules, and changes to the tax breaks for EVs. As well, tariff changes have made a negative effect on the profits from Honda’s petrol and hybrid cars.
Honda also pointed to increasing rivalry in China and other Asian countries, where a lot of new EV companies have done well by putting a lot of effort into cars controlled by software, and advanced systems to help the driver. Honda has admitted it has found it hard to compete on price in these markets against the newer companies that can work more quickly on software-based cars.
As a result of these difficulties, Honda says releasing the three EVs might have caused more financial losses, instead of increasing profits.
In the future, Honda intends to put its strategy into better balance by giving more importance to hybrid vehicles, while still going on with EV development, but at a slower rate.
The company thinks hybrids will remain a key ‘bridge’ technology as the EV market changes. Honda also plans to strengthen its place in major markets – including the U.S., Japan, and India – by increasing its range of vehicles, and making its costs more competitive.
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