In a surprising turn of events, Honda has announced a staggering $21 billion cut to its planned electric vehicle (EV) investments, all while claiming there's a decline in EV sales—despite contrary evidence.

The automaker's bold declaration came from Japan, revealing plans to abandon its goal of making EVs 30% of its global sales by 2030. Instead, they're redirecting focus to hybrids, which are heavily reliant on fossil fuels and contribute to air pollution and climate change.

Honda's reduction in expected investment, dropping from a jaw-dropping 10 trillion yen ($69 billion) to 7 trillion yen ($48 billion), throws into question their commitment to sustainability, especially as actual EV sales continue to rise globally.

Are EV Sales Really Slowing?

Contrary to Honda's claims, 2024 saw EV sales soar—higher than 2023 levels, while gas car sales peaked back in 2017 and have been steadily declining. So where is the slowdown they cite?

Honda's decision to reduce its EV roadmap has been met with skepticism, as other automakers are doubling down on their electric futures. The company's new timeline for hybrid models, expected to hit the market starting 2027, means we could still see these pollutant-emitting vehicles clogging our roads for years to come.

Misguided Strategy in a Changing Market

Honda's previous targets were already modest compared to competitors, many of whom have also re-evaluated their EV aspirations under false premises of cooling demand. However, as countries like the U.S. and California push for significant EV market shares by 2030, Honda's retreat to hybrids could see them lagging behind.

The automaker stated hybrid vehicles would aid the transition to EVs; however, as major markets like China experience rapid EV adoption, Honda's strategy appears increasingly outdated and misaligned with the industry's trajectory.

Could This Be a Recipe for Disaster?

While Honda currently finds some success with its Prologue EV—now among the best-selling electric vehicles in the U.S.—the looming question is whether their step back will prove catastrophic. With profits slipping due to rising competition from local brands in China, Honda may be paving its own path to obsolescence.

In an industry where moving forward is key, Honda's decision to cut back on EV investments seems counterintuitive, potentially resulting in lost market share and further economic decline for Japan.

If Honda is serious about staying relevant, they need to embrace the EV wave, not ride the brakes. Otherwise, they may be accelerating right out of the competition—and the business.