In an announcement last week, Honda revealed that it had cancelled three battery-electric vehicle programs. All three vehicles were expected to enter production in North America, specifically in Ohio, where the automaker has a massive manufacturing presence. This decision came due to unfavorable tariff policies in the U.S., the decline of vehicle competitiveness, specifically in Asia, and several other factors. It attributed the latter to the cost of EV development.
As a result of financial decline and an uncertain EV landscape, particularly in the U.S., Honda decided to change course. In doing so, it killed off the 0 Series SUV and sedan, as well as the Acura RSX. The company also noted that it failed to deliver vehicles at a good value, especially against newer EV makers. This led to the brand’s competitive decline. Additionally, the profitability of its gas and hybrid models fell, resulting in the cancellation of the three EVs.
In the meantime, Honda will reassess its resources and focus on its hybrid lineup. Furthermore, it will develop a flexible long-term EV strategy by assessing profitability and market trends. For the near term, the automaker will enhance its lineup with next-generation hybrids and lean on its financial services and motorcycle business. The untimely deaths of the RSX and the 0 Series vehicles are unfortunate, as two of those are essentially ready. That leaves the Prologue, which is based on a General Motors architecture, to soldier on.
Simply put, Honda made an incredibly short-sighted decision. It puts them behind even EV latecomers like Subaru and Toyota. With gas prices skyrocketing and a potential change in the U.S. political landscape looming once again, consumers continue to turn to EVs and other electrified vehicles to avoid paying so much at the pump. With this decision, Honda cedes the EV market.
Source: Honda
