Honda has reportedly decided to scale back its plans for larger electric SUVs after President Trump’s recent changes to US EV incentives. This comes alongside the company’s upcoming battery-powered models like the Concept 0 SUV and Sedan, showcased at CES in Las Vegas earlier this year.
The initial plan included five-seat SUVs and sedans alongside a seven-seat SUV; however, it seems they’ve pulled the plug on that idea. A report from Asia-Nickakey indicates that Honda’s demand for electric vehicles hasn’t met expectations, leading to this decision.
The reduction in federal tax credits for EV buyers, which Trump has proposed at $7,500, is being cited as a significant factor in Honda’s revised strategy.
In reaction to these market conditions, Honda is reportedly slashing about $48 billion (7 trillion yen) from its R&D budget for electric vehicles.
This decision is quite surprising, especially considering that just six months ago, Honda seemed poised for a partnership with Nissan. Given the current struggles of larger electric vehicles to gain traction, it’s not entirely unexpected.
Take, for example, Kia’s EV9, noted as Australia’s first electric seven-seater. Its starting price is around $106,500, going up to about $139,500 with options. Thus far, Kia has sold only 165 EV9s in Australia this year, which pales in comparison to the Sorrento that recorded over 5,100 sales in the same timeframe. Such sales discrepancies are becoming common with electric models.
In the same vein, Mercedes has sold 25 combustion engine S-Class sedans compared to all electric EQs this year, while VW’s sales of electric IDs.4 and ID.5 models are at about a 10:1 ratio against their cheaper Tiguan models.
It seems many manufacturers are re-evaluating their timelines and targets for electric vehicles both in Australia and internationally. For instance, Ferrari is reportedly delaying its electric SUV development, and Lamborghini has postponed plans for an electric model based on the upcoming Porsche Cayenne. Additionally, Audi has extended deadlines for its combustion-driven products, while Mercedes plans to continue offering more V8 petrol models at customer request.
