Automakers did not abandon electric cars in 2025; several recalibrated near-term targets, spending or product timing. Slower growth in some markets, difficulty making battery-electric vehicles profitable for many non-Chinese manufacturers and policy uncertainty all contributed. Honda offered a clear example: it lowered its 2030 EV expectation and planned electrification investment, while putting more emphasis on hybrids and retaining a longer-term zero-emission goal.
Why are automakers scaling back EV plans in 2025?
The shift was a recalibration, not a single industry-wide retreat. The International Energy Agency (IEA), in its Global EV Outlook 2025, said a number of automakers had scaled back near- and mid-term targets over the preceding year. It identified lower-than-expected demand and the difficulty many non-Chinese automakers faced in making battery-electric vehicles (BEVs) profitable. Policy changes and uncertainty in some markets added risk to plans through 2030.
Those pressures can lead a company to change its expected sales mix, defer or revise products, reduce planned investment, or build more than one kind of powertrain on a production line. Those are different choices; none alone establishes that the company has cancelled its EV program or given up a longer-term goal.
A slower growth rate is not falling sales
The IEA reported that 1.6 million electric cars were sold in the United States in 2024, representing more than 10% of the market. Sales still grew, but the annual growth rate slowed to 10%, from 40% in 2023. A market can keep expanding while growing more slowly than automakers had expected when they set earlier targets.
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The IEA also discussed policy and trade uncertainty, including announced U.S. auto tariffs, as factors affecting future sales and pricing. Its account points to several contributing conditions; it does not attribute automakers’ decisions to one policy change alone. Nor does the U.S. experience describe every region.
Which carmakers changed their electric-vehicle targets?
The clearest company-level example in the 2025 announcements covered here is Honda. The IEA also noted that Ford and Volvo had scaled down European all-electric ambitions, while Renault continued to describe a dual internal-combustion-engine (ICE) and electric approach. These examples illustrate different responses, not a common cancellation of EV plans. The IEA’s target review reflects company declarations available at the end of the first quarter of 2025; it is not a complete inventory of every automaker’s later announcements.
Honda: lower near-term expectations and spending
In its May 20, 2025 investor briefing, Honda said it had revised its product-launch plan in response to a market slowdown. The company lowered its expectation for the share of global sales that would be EVs in 2030 to below its previous 30% target. At the same time, planned electrification investment through fiscal year 2031 fell from 10 trillion yen to 7 trillion yen—a 3 trillion yen reduction. These are revised plans and expectations, not reported sales or completed savings.
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Reuters reported that Honda CEO Toshihiro Mibe described the market as difficult to read and said Honda then saw EVs accounting for about one-fifth by the 2030 financial year. That reported estimate gives more context to the company’s official statement that its expectation was below 30%; it should not be mistaken for a new formal target or a realized result.
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Other regional examples
The IEA said Ford and Volvo had scaled down their European all-electric ambitions. It described Renault as continuing a dual ICE-and-electric approach. The report does not make those approaches equivalent: revising an all-electric ambition differs from planning to offer multiple powertrains.
Why are automakers investing in hybrids again?
Hybrids let automakers offer lower-fuel-consumption vehicles without relying on a full battery-electric transition for every buyer or model. For Honda, the May 2025 shift toward hybrids was an explicit part of its product strategy, not evidence that hybrids and BEVs are interchangeable. A conventional hybrid combines an engine and electric motor; it is not a battery-electric car. The IEA figures below concern electric-car sales and declarations, not hybrid sales.
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Reuters reported Honda’s plan to introduce 13 next-generation hybrid models globally over the four years beginning in 2027. Honda also announced a goal of selling 2.2 million to 2.3 million hybrid vehicles by 2030, compared with 868,000 hybrids sold in 2024. The future model launches and sales goal are plans, not completed outcomes.
Are automakers abandoning electric cars?
No. Honda’s revised near-term plan coexisted with its stated longer-term ambition: Reuters reported that the company still planned for battery-electric and fuel-cell vehicles to account for all new-car sales by 2040. Fuel-cell vehicles are a distinct powertrain from BEVs, so that 2040 ambition should not be described as a battery-electric-only target.
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The IEA likewise said the outlook for electric-car sales remained robust even as automaker declarations became less certain. Its review shows how much company expectations vary by region. The ranges are declarations for 2030 available by the end of Q1 2025, not IEA forecasts, guaranteed sales shares or commitments that every automaker will meet.
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| Market | Range of company declarations for electric-car sales in 2030 | How to read it |
|---|---|---|
| United States | Less than 30% to 70% | The lower end had been around 50% a year earlier, indicating that some declarations were revised downward. |
| Europe | Roughly 60% to 85% | The IEA described a broad range of company positions, rather than one shared target. |
| China | 55% to 80% | The IEA said electric-car sales remained strong over 2024. |
Regional differences matter. U.S. policy and trade uncertainty, European company strategies and China’s strong EV sales are not interchangeable conditions. A company declaration is also not a sales forecast: it records an ambition or plan, which can change as demand, costs and policy change.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What Honda’s Ohio EV Hub says about manufacturing flexibility
Honda’s Ohio EV Hub is an example of adapting production rather than simply adding or removing EV capacity. In a February 3, 2025 announcement, the company said its Ohio plants were being retooled so ICE, hybrid-electric and EV models could be made on shared production lines. Honda described the Acura RSX EV as the hub’s first planned battery-electric model, followed by Honda 0 Series production models. Those were prospective product and facility plans in that announcement, not confirmation that the models had entered production.
Bob Schwyn, senior vice president of Honda Development & Manufacturing of America, said the shared-line approach was intended to help Honda respond to changing customer needs and market conditions. In practical terms, such flexibility can give a manufacturer options if demand shifts among powertrains. It is Honda’s stated approach, not proof that all automakers are converting plants the same way.
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How to interpret an automaker’s “EV retreat”
The phrase can obscure what actually changed. To assess a company announcement, separate the type of evidence and the part of the plan being revised:
- Target horizon: Is the announcement about near-term launches or production, a 2030 sales mix, or a longer-term 2040 ambition?
- Powertrain: Does “electric” mean BEV, plug-in hybrid, conventional hybrid, extended-range EV or fuel-cell vehicle? These categories are not equivalent.
- Plan versus outcome: A target, investment plan or scheduled model launch is not the same as actual production or sales.
- Capital and timing: Did the automaker cut investment, delay a launch, cancel a program or leave it unchanged? Each is a different decision.
- Geography: Is the company discussing the U.S., Europe, China or global operations? Regional targets and conditions differ.
- Manufacturing: Is the company reducing dedicated EV capacity, or making lines adaptable across powertrains?
For readers making personal vehicle or budget decisions, the distinction is useful: a manufacturer’s target revision does not itself establish the future availability, price or running costs of a particular model. Those depend on the specific vehicle and market. Treat company targets as signals of strategy, not as guarantees about what will be on sale when you are ready to buy.
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