This one’s big. Honda has just announced that it's pulling the plug on one of its most aspirational projects: the 0 series electric vehicles (EV). But the 0 SUV and saloon are not the only ones down the chute; the Acura RSX has also been dropped from the Japanese carmaker’s plans.
All three of these EVs were reportedly headed to production in the coming month. These cars were planned to be constructed around Honda’s in-house “Zero” EV platform, so it's a big deal for them to be killed.
Just a few months ago, Honda was marketing its futuristic "0 Series" EVs as the focal point of its next-generation strategy, and even invested more than US$4.4 billion to build the Ohio EV Hub to establish a North American supply chain for its EV production.
So, with everything looking ripe for these cars, what caused this decision? Apparently, an “extremely challenging earnings situation.” Per Honda, the call was made as a part of a reevaluation of the company's EV strategy due to changes in the business environment.
The carmaker called out declining profitability in its automobile business owing to “unfavorable impact of changes in the US tariff policies on gasoline and hybrid vehicle business” and “a decline in the competitiveness of Honda product in Asia due to the impact of the allocation of more resources to EV development.”
Honda cautioned that the global restructuring costs could amount to around $15.7 billion. Take that in. This means Honda is taking its first yearly loss in almost 70 years. Now take that in.
This is all thanks to a surge of new EV makers from China entering the market with more sophisticated, more efficient vehicles. On top of that, US tariffs and growing competition in Asia are some of the other factors hurting its revenues.
"Honda determined that starting production and sales of these three models in the current business environment, where the demand for EVs is declining significantly, would likely result in further losses over the long term," reads Honda’s statement.
It’s a big fat bummer for a lot of people. The 0 Series was nothing like what Honda was already doing. It was supposed to be developed on an all-new dedicated EV platform, designed around a philosophy Honda called 'Thin, Light and Wise.'
Even the Acura RSX electric crossover got a lot of enthusiasts buzzing, despite it having next to nothing in common with the original sports coupe it borrows its name from. Early glimpses showed revolutionary styling, a new operating system called ASIMO OS, which would incorporate sophisticated driver-assistance systems, as some of the features of these would-be EVs.
But Honda’s not the only one putting EV plans in reverse in the USA. Ford, Hyundai, Kia, GM, Volkswagen, and Stellantis have all slowed EV rollouts and are even going as far as scrapping certain projects altogether.
But it's not all doom and gloom. While Honda just announced this news, Toyota, its peer brand from the same country, is set to launch three new EVs this year. Honda will have zero, but is not completely giving up on electrification despite this news. Rather, it is anticipated that the company will move toward a more gradual transition, concentrating more on short-term hybrid vehicles, while also advancing EV technology.
It is currently putting the finishing touches on the upcoming Pilot and Passport that will run on a clean-sheet V6 hybrid drivetrain. Honda still makes a lot of money from its hybrids.
Source: Honda
