Honda Blames EVs For Drop In Sales

Honda says that overly optimistic forecasts regarding electric vehicles have negatively affected the company’s financial health. They also predict that the transition to electric vehicles will take longer than expected.

What has been known all these years is that Japanese brands have always been the least willing to tie their future to electric cars. Not that they consider it the wrong way, but that it should be done gradually and in accordance with the pace of the market.

This is completely contrary to the views of the European Union, and for the time being, the reality vindicates those who believe that forcing the transition to 100 percent electric vehicles is a mistake. While it is true that sales continue to grow and that the market share of this type of car is increasing, it is also confirmed that it is not growing at the predicted pace. For this reason, in some European markets it is possible to buy only one model of the Japanese brand with a strange name—e:Ny1.

Several brands have had to modify their roadmaps, softening the timelines for all-electric drive. Others, like Toyota, are reaping the rewards of their cautious approach, achieving record sales and profits thanks to their hybrid models.

Despite Honda’s relatively uncompromising electrification strategy, its financial health has “suffered.” The Japanese automaker recently wrote off 1.23 billion euros in costs related to investing in the development of electric vehicles.

In this sense, Noriya Kaihara, vice president of Honda, admitted to Automotive News that the company suffered “a decline due to low sales of electric vehicles.” One might think that this low sales volume may be due to Honda’s lukewarm commitment to this type of technology, which creates mistrust among consumers.

But whatever the reasons, Honda is beginning to doubt that it will sell two million electric vehicles by 2030. In fact, it lowered that forecast to just 700,000 units and sees hybrid sales taking off.

Honda’s initial plan was to become a 100 percent electric brand by 2040. Therefore, it is clear that it is not the most optimistic company on the market in this regard, and Vice President Kaihara made it clear once again.

• Also See: Honda Doesn’t Rule Out A Civic Type R EV