Honda Cancels Plans for Three News EVs as It Scrambles to Rethink Strategy

Honda is the latest car company to scrap upcoming EV projects, citing “changes in the business environment.”

The Japanese automaker announced today that it has cancelled the planned launch of three new EVs. The shelved models are the Honda 0 SUV, the Honda 0 Saloon sedan, and the Acura RSX. The three vehicles were previously planned to be produced at the Honda EV Hub in Ohio later this year.

Honda said it had to reassess its EV strategy following major policy changes in the U.S., including the easing of fuel-efficiency regulations and the expiration of federal EV subsidies, as well as growing competition from China.

Honda is not the only car company to make similar moves recently. For instance, Hyundai discontinued the standard Ioniq 6 in the U.S. this year. Ford also said late last year that it was canceling production of an all-electric version of its iconic F-150 pickup truck and scrapping plans for a new electric van.

Ford CEO Jim Farley said last year that the rollback of EV subsidies could cut demand for EVs in half. And a recent survey from Deloitte found that only 7% of Americans want their next car to be electric. Respondents said their top concerns about EVs were driving range, charging time, and higher prices.

Honda said another major concern is growing competition, especially in the Chinese market, from the “rapid emergence of newer EV manufacturers that leverage their short product development cycles.”

Just this month, BYD’s luxury brand Denza unveiled what it is calling “the world’s longest pure electric driving range vehicle.” Denza said its new Z9 GT can travel up to 1,036 km (644 miles) on a single charge under China’s CLTC testing standard. For comparison, the Honda Prologue has an estimated driving range of 308 miles based on EPA ratings.

“In such a difficult competitive environment, Honda was unable to deliver products that offer value for money better than that of newer EV manufacturers, resulting in a decline in competitiveness,” the company said in a news release.

In response, the company says it will reassess its resource allocation and strengthen its hybrid models. Ford’s Farley similarly has said the American car maker will shift some of its resources toward hybrids to adapt to the shifting market.

But this change is going to cost Honda big time. The company says it expects record losses for the fiscal year ending March 2026. Its operating expenses are estimated to be between 820 billion yen ($5.1 billion) and 1.12 trillion yen ($7.5 billion). And that’s just the start. The company expects to incur additional expenses and losses next year, and says its overall shift in EV strategy could end up costing as much as 2.5 trillion yen ($15.7 billion).

Conversely, not all EV makers are following the same playbook. The American luxury EV maker Lucid announced today three new high-volume mid-size SUV models as a pathway to profitability.

“With Midsize, we didn’t compromise what makes a Lucid special; we engineered it to scale,” said Derek Jenkins, senior vice president of design and brand at Lucid, in a press release. “These vehicles deliver unmistakable Lucid design and driving characteristics, while embracing a radically simpler, more efficient approach to manufacturing and cost.”

The first two models have been dubbed the Lucid Cosmos and Lucid Earth.