Earlier this year, Honda realized its push to go full EV may result in financial troubles for the Japanese automaker. With demand for EVs slower-than-expected in markets like North America, Chinese automakers dominating the electrified car market, Honda pulling the plug on three EVs, and recording a 42% plunge in group net profit in February 2026, the Japanese automaker is rethinking its long-term electrification strategy.

During the 2026 Honda Business Briefing, the automaker announced it will reallocate more development and production resources towards hybrid models, which are currently in high demand. In fact, Honda plans to launch 15 next-generation hybrid models globally by the end of the fiscal year, which ends on March 31, 2030, primarily in North America.

Beyond that, Honda is striving to reduce the cost of its next-generation hybrid system by more than 30% compared to the current system, which was first launched in 2023. The automaker even plans to improve the fuel economy of its next-generation hybrid model by more than 10% by combining its next-gen hybrid system with an all-new platform and a newly developed electric AWD unit.

To better focus on hybrid vehicles, Honda and its joint venture partner, LG Energy Solution, will convert part of the EV battery production lines to hybrid battery production. Meanwhile, Honda's auto plants in Ohio will reallocate all excess capacity to the production of hybrid and gasoline vehicles, as well as make all of its auto plants in North America produce hybrid vehicles.

Despite dropping its plans to go full EV by 2040, Honda will still continue to strive to achieve carbon neutrality by 2050 via a multi-faceted approach to achieving its goal. These include EVs, hybrid vehicles, and carbon-neutral fuels. As far as EV development is concerned, Honda will continue to lay the groundwork for introducing highly competitive EV hardware platforms and solid-state batteries.

With Honda redirecting its attention to hybrid vehicles, we can expect more e:HEV models to come from the Japanese automaker in the coming years.