At its 2025 Business Briefing, Honda Motor Co., Ltd. President and CEO Toshihiro Mibe detailed the company’s renewed focus on electrification and intelligent technologies, amid changing global market dynamics.
Honda reaffirmed its commitment to “achieve carbon neutrality for all products and corporate activities” by 2050, while also aiming for “zero traffic collision fatalities”. However, recent shifts in global EV adoption, due to evolving regulations and trade policies, have prompted a significant strategic realignment.
It was discussed that Honda’s value creation must not be limited to electrification, but also include enhanced application of intelligent technologies, and then offer such value in more accessible and affordable ways to a broader range of customers.
In response, Honda plans to refocus its automotive strategy in two main areas: enhancing the competitiveness of its electric and hybrid vehicles by integrating advanced intelligent technologies, and reassessing its powertrain lineup to strengthen business foundations.
As part of this shift, Honda is developing a next-generation Advanced Driver Assistance System (ADAS), capable of managing vehicle operations from departure to destination, including complex urban environments. The company plans to begin rolling out these features in core EV and HEV models from 2027 in Japan and North America. Collaborations, such as one with the Chinese startup Momenta, will tailor the technology for specific regional markets.
Honda’s current hybrid system, the e:HEV, will see further innovation. The goal is to make it the world’s most efficient powertrain, with improved fuel economy and a more exhilarating driving experience. The next-generation hybrid system is also expected to cut costs by over 50% compared to 2018 levels and by more than 30% compared to 2023 systems.,
In North America, where demand remains strong for larger vehicles, Honda is developing a powerful hybrid system to meet towing and performance needs. Thirteen new HEV models will be introduced globally between 2027 and 2031 to meet rising hybrid demand.
With demand for EVs softening, Honda has revised its target for global EV sales in 2030 to fall below its previous 30% forecast. Still, the company views EVs as central to its long-term sustainability goals.
The upcoming Honda 0 Series will debut next year as the cornerstone of the brand’s EV strategy. These vehicles will incorporate SDV (software-defined vehicle) capabilities, enabled by the ASIMO OS and advanced AD/ADAS functions. Powered by a new Centralised E&E Architecture, they will also feature a high-performance SoC developed in collaboration with Renesas Electronics, offering 2,000 TOPS of AI capability with 20 TOPS/W efficiency.
By 2030, Honda aims to increase its total global automobile sales beyond the current 3.6 million units, targeting 2.2 million of those as HEV sales. The new “H mark” will be introduced on both future EVs and next-generation HEVs from 2027 onwards, symbolising the company’s transformation.
To navigate unpredictable shifts in EV adoption, Honda is building a more flexible production model. Mixed production lines capable of building both EVs and HEVs will help adjust output to market demand. Honda is also maintaining its “local production for local consumption” approach, with adaptable supply chains that can shift production as needed across its facilities.
Turning to motorcycles, Honda reported record annual sales of 20.57 million units for the fiscal year ending March 2025, capturing roughly 40% of the global market and setting sales records in 37 regions. With growth expected particularly in the Global South, the company aims to meet demand through a wider product offering and improved supply chains.
On the electrification front, Honda has launched several new electric motorbikes in markets including India, Indonesia, and the Philippines. The company’s CUV e: is also scheduled to arrive in Europe and Japan this year. From 2028, a dedicated electric motorcycle plant in India will begin production, supporting Honda’s goal to become the global leader in electric motorbike sales.
To maintain this momentum, Honda plans to expand both ICE and electric motorcycle models. Its long-term targets include securing 50% of the global market and achieving a return on sales (ROS) of over 15% by fiscal 2031.
In terms of financials, Honda is adjusting its capital strategy. Last year’s plan to invest ¥10 trillion in electrification has now been revised to ¥7 trillion by fiscal 2031, due to delays in launching a comprehensive EV value chain in Canada. The investment amount was reduced by 3 trillion yen.
The company expects to generate more than ¥12 trillion in cash during the five years from fiscal 2027, with much of it coming from growing HEV sales and stable earnings from the motorcycle division. Despite reducing EV-related investments, Honda foresees only a small increase in HEV-related spending and remains committed to delivering over ¥1.6 trillion in shareholder returns.
Aiming to reach a company-wide return on invested capital (ROIC) of 10% by fiscal 2031, Honda will continue adapting its resource allocation in response to market trends. The company also plans to introduce a dividend-on-equity (DOE) system to demonstrate its long-term commitment to delivering shareholder value.
Through this strategic realignment, Honda aims to strengthen its position in both electrification and intelligent mobility, while improving profitability and ensuring flexibility amid market uncertainties.
