Toyota, Honda, Porsche…: Car companies cutting down EV plans

Electric vehicle (EV) demand is cooling, and the resurgence of Trump’s “drill, baby, drill” approach has dented global momentum for clean energy, prompting several major car manufacturers to scale back their EV ambitions.

Analyst warnings indicate that moves to cut EV incentives and support, especially in the US under Trump-aligned Republican proposals, may lead to a 40 per cent drop in EV sales, delayed investments, and reduced clean-energy funding.

German car maker, Porsche, has scrapped its plans to produce high-performance batteries through its Cellforce subsidiary. The decision stems from “slower ramp-up” in EV adoption and “challenging market conditions” in both the United States and China.

“Porsche is not pursuing its own battery cell production for reasons of volume and lack of economies of scale,” said Oliver Blume, who serves as CEO of both Porsche and majority owner Volkswagen.

Honda has also revised its electrification strategy. It has downgraded its target of having EVs comprise 30 per cent of global sales by 2030 to closer to 20 per cent, due to sluggish global EV uptake and market uncertainties.

Honda is reducing its planned investment in electrification by 3 trillion yen ($21 billion) to 7 trillion yen ($48 billion).

Honda, which makes the Civic and Accord car models, will be more aggressive in producing hybrids instead, said Honda Motor Co. Chief Executive Toshihiro Mibe.

Honda’s leadership attributes this shift to disappointing EV sales, declining market share, and the ending of US green-tech subsidies—factors that are squeezing profits and margins.

As one of the world’s largest automakers reconsiders its EV trajectory, it is likely that others may follow suit.