Honda CEO: EVs Under $35,000 Are the Next Battleground

The timetable for wider adoption of electric vehicles has been pushed back about five years in the U.S. but when the market does catch up, the real battleground will be affordable EVs, Honda Motor Company CEO Toshihiro Mibe said.

With U.S. tax incentives being no more and with the Trump Administration in place, Mibe thinks the growth of EV sales has been pushed back by five years. That means there is no great need for affordable electric cars right away, but Honda by decade's end might need to expand its product range to meet demand for cheaper electric offerings.

The CEO thinks the main area of competition in North America will be for EVs priced less than $30,000. Already Nissan has the Leaf, GM has a new 2027 new Chevrolet Bolt, and Ford is working on a family of affordable electric vehicles starting with a small pickup truck.

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More Hybrids as Interim Solution

Honda will grow its hybrid business in the interim, while sprinkling in a few new electric vehicles and holding off on a big EV push in the U.S. until the political climate is more favorable. The manufacturer's future EV strategy for the U.S. will be made after monitoring the situation, waiting to see the results of the midterm elections in the U.S., and how the Trump Administration acts, Mibe told reporters in Japan in conjunction with the Japan Mobility Show.

Honda has new hybrid platforms and powertrains coming in 2027 that will enhance performance while reducing cost by 20 percent. The plan is to offer more hybrids and make them a larger percentage of North American sales, offsetting a decline in EV sales in the short term. Global hybrid sales volume will increase from about 800,000 units today to more than 2 million annually by 2030, Mibe said.

Longterm EV Targets Largely in Place

Honda is not abandoning its longer-term goals to sell only EVs by 2040 and achieve carbon neutrality by 2050, but the cadence of the plan has changed in regions like North America. That's because the pace of EV adoption is slower than originally expected. With those EV adoption plans apparently delayed by about five years, Honda will likely have to scramble harder as 2040 approaches.

Honda and GM in 2022 announced a partnership to develop low-priced EVs but the project was canceled in 2023. Both companies had the same goal of expanding volume to reduce costs and explored different ways to achieve it, but Mibe said they found it difficult to come up with one clear winning strategy. Bottom line: “Unless the battery cost is significantly lowered, the total cost of the EV cannot be reduced significantly. That’s the reality,” he said.

Solutions like lower-cost solid-state batteries were originally thought to be viable for 2025. But that has been pushed back to 2030 even though Honda’s research is quite advanced on affordable batteries with increased capacity. The automaker has established a pilot production line in Tochigi, Japan, and hopes to launch a vehicle with solid-state batteries into the market by 2030. But the company needs EV sales volume to justify the investment, Mibe pointed out.

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Growing the Honda 0 Series Family of EVs

Honda used the Japan Mobility Show in Tokyo for the world premiere of a prototype of its next-generation electric SUV, a smaller and more affordable member of the 0 Series called the Alpha. The Alpha is a right-hand-drive global vehicle that will be built in India for sale in that country as well as in Japan and other Asian countries, beginning in 2027. There are no plans to bring it to North America because it is deemed too small for our market. But some of its tech could migrate into a vehicle for North America, said Toshikazu Hirose, the car's chief engineer.

The Alpha follows the Honda 0 Saloon and Honda 0 SUV that broke cover in January at CES. Future EVs will be known as 0 Series but as for the individual nameplates, Alpha is the only one finalized so far. Decisions have not been made on the full names of the sedan and SUV for North America, Mibe said, but they will be 0 something.

The 0 Series SUV comes in late 2026 as a 2027 model, and the sedan follows in 2027. The launches will continue as planned but initial volumes will probably be less than originally envisaged, Mibe acknowledged. Honda thinks its total sales will remain the same or more, with increased hybrid sales expected.

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The Honda Space Hub Concept

Honda Electric Three-Row SUV Coming Later

Honda had also shown a larger three-row EV, the Space-Hub concept. Plans for production are on hold until at least 2027, with the focus on the first three 0 Series models.

Research and development work continues on a full lineup of next-generation EVs. There are new platforms for small, medium, and large models. Plans include a large electric SUV, but it could be 2030 or later until it arrives, the CEO said.

The next generation of 0 Series EVs was to come from Honda’s Canadian plant in Alliston, Ontario, in 2028, but the investment has been frozen and the plans pushed back two years because of the Trump Administration’s tariff policy that has made it more expensive to sell vehicles in the U.S. that are made in Canada, Mexico, or most other countries.

Another unknown is what changes will be made with the negotiation of a new North American trade treaty between the U.S., Canada, and Mexico with the pending expiration of the USMCA agreement. Honda has no plans to make big investments in Canada and Mexico until executives have a better knowledge of how the USMCA will fare in the future, Mibe said. The U.S. is the main market, and Honda has already invested $26 billion, is making yearly investment of $2.5 billion, and will continue to invest in product, plants, AI, and autonomous driving.