Honda ditches EV target, bets on hybrids after record loss

Honda has recorded its largest loss in company history, marking a dramatic turning point for one of the world's most established automakers. The company attributed the financial damage to two key factors: the impact of US tariffs introduced under the Trump administration and the intensifying pressure from Chinese electric vehicle manufacturers, who have aggressively expanded their global market share with competitively priced models.

In response, Honda has officially abandoned its previously stated EV sales targets and is redirecting its focus toward hybrid technology. While Honda has long offered hybrid models — most notably under its e:HEV lineup — the new strategy signals a clear retreat from the aggressive electrification roadmap the company had outlined in recent years. This pivot reflects a growing tension within the global auto industry between long-term EV ambitions and short-term commercial realities.

As part of the strategic reset, Honda is also reviving the Prelude, the beloved sports coupe that last went on sale in 2001. The new Prelude will return as a hybrid model, blending nostalgic appeal with the company's renewed commitment to electrified — but not fully electric — drivetrains. The move is widely seen as an effort to re-energise the brand and attract buyers who remain hesitant about fully committing to battery-electric vehicles.

Honda's situation is emblematic of a broader industry challenge: the EV transition is proving slower and more expensive than many manufacturers anticipated. Chinese brands like BYD have fundamentally disrupted the competitive landscape, while policy uncertainty in major markets — including the US — has made long-term planning increasingly difficult. For consumers and investors alike, the question now is whether Honda's hybrid-first approach is a pragmatic bridge strategy or a sign of deeper structural problems ahead.