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EV interest waning? Honda is going all-in to be the next Tesla
Posted by Talbot Payne on November 6, 2025
Tokyo — The U.S. auto industry is navigating tricky roads as manufacturers face stalled electric vehicle demand, rising tariff costs, and intense competition. But Honda Motor Co., which counts the United States as its biggest customer with 40% of global sales and operates four manufacturing plants in three states employing over 23,000 associates, is determined to maintain a steady course.
In a wide-ranging interview at Honda headquarters in Tokyo, CEO Toshihiro Mibe said that the company remains on course for a fully electric future like Tesla Inc. and will continue to prioritize the United States for manufacturing investment.
Among legacy automakers, Honda has been — along with General Motors Co. — the most forceful in its commitment to ending the production of internal combustion engines, a challenge the company calls its Second Founding. Long one of the world’s premier ICE manufacturers — both on-road and on the racetrack — the brand gave a glimpse of its electric future this week in showcasing three near-production, so-called O-Series models at the Japan Mobility Show here.
Henry Payne, The Detroit News
Honda’s push comes despite dramatic changes in the U.S. political environment, with EV sales slowing, Congress’s elimination of the $7,500 tax break, the Trump Administration’s rollback of emission regulations, and billionaire global warming financier Bill Gates’ dismissal of a climate crisis.
“Electrification now is a little bit different from what we were expecting before,” said Mibe, who has previously projected that Honda would end ICE sales by 2040. “Maybe (we’ll see a) five-year delay as compared to our first expectations. And probably that means from 2040 on, the electrification will have to go faster. But as long as humankind has not abandoned efforts for global warming innovation, we have to keep up with our responsibility.”
Honda’s mobility presentation at the Japan Show was striking for its parallels to Elon Musk’s companies — not just in EVs, but in its commitment to a moral mission statement and the pursuit of reusable rockets.
Henry Payne, The Detroit News
“Before making a profit, there is one important condition: whether something is ‘right’ or ‘not,’” read a slide in Honda’s corporate presentation on rocket development. “We think ‘What can I do for society and for others?’ Since its founding, Honda has driven technological innovation and product development fueled by this very passion.”
That passion, says Honda, has driven its Second Founding to address global warming. The commitment dovetails with Honda’s belief that electric motor-driven technology is superior to ICE, and that customers will ultimately choose the former.
Sam Abuelsamid, Telemetry
Both Japan and U.S. customers have proven resistant to EVs, but the company has forged ahead with electrification plans. The commitment is not dissimilar to that of Toyota Motor Corp., which aimed to pioneer hybrid vehicles 25 years ago with the Toyota Prius. Once a nerdy outlier, Prius today is the halo car to a hybrid-focused model lineup.
“Honda has a long-term plan, but they are smart enough not to sacrifice their current profitable ICE vehicles to get there,” said iSeeCars.com Senior Analyst Karl Brauer. “Unlike some other automakers — Porsche, Dodge — you haven’t heard Honda say they are sunsetting ICE models to make EVs. Honda is going to make ICE Civics and CR-Vs as long as there is demand.”
Indeed, Honda gave the media a sneak peek of its next-generation midsize sedan and SUV platforms — the basis for its best-selling ICE Civic, Accord, and CR-V models — at its Toshigi Proving Grounds.
Henry Payne, The Detroit News
Tesla has been the pioneer of EV technology, accounting for 40% of U.S. EV sales. But Honda is determined to catch Tesla with its radical O Series vehicles. First up, the O Series SUV in 2026, which looks like something that drove off the set of a “Blade Runner” sci-fi movie. It will be followed by the O Series Saloon, which looks like a Lamborghini sedan, and is due late next year. The third, the O Series Alpha, debuted on Honda’s sprawling stage here in Tokyo.
The SUV and Saloon will be produced in Marysville, Ohio, which Honda has dubbed its EV Hub. The sub-compact Alpha will be made in India for Asian markets.
The 43-year-old facility is in the midst of a major manufacturing upgrade, so it has the flexibility to produce EVs, hybrid, and ICE vehicles. The reconstruction is part of a $26 billion Honda investment in its U.S. operations.
“The future is to bring something to market that people are really going to be excited about,” said Lance Woelfer, vice president for North American sales, who was in Tokyo for the Japan Show. “We showed these vehicles to our dealers not long ago and got a tremendous response. They are excited by the new design theme and how we differentiate our design from others.”
O Series production in Ohio comes as the Trump Administration has erected a 15% trade barrier to Japanese imports and 25% tariffs against Canadian imports, where Honda makes some of its Civic sedan and CR-V SUV models.
“Flexible, non-union manufacturing is Honda’s sweet spot,” said analyst Brauer. “It costs more up front than saying you’re just going to build, say, a single platform EV. But in the long run, they can build what the market demands, and it doesn’t risk a plant with no capacity, which is really expensive.”
Mibe was blunt about where Honda’s investment will be in the new tariff era: “We did consider a large investment for EV for Canada, but we’ve already decided to freeze this. For us, the U.S. market is the main market, and … we are making yearly investment of $2.5 billion into the U.S., which we plan to continue into the future as well.”
In addition to the Marysville line upgrades, Honda has begun plans to remake production of its East Liberty, Ohio, plant for more flexible production. That flexibility matches Honda’s flexible approach as it transitions to all-electric. With EV sales challenges, Mibe said the company is focused on hybrids.
Henry Payne, The Detroit News
“I believe that (hybrid) volume would continue to increase until 2030,” said the CEO. “Currently, we (sell) 0.8 million units (per year). Our prospect is that the number would go over 2 million units by 2030. The thing is, hybrids are not going to give us complete carbon neutrality . . . so the question is: how far can we continue using them? What we do after that will really depend on what the U.S. regulations might do.”
Though there are subcompact EVs in the U.S. market like the Nissan Leaf and Chevy Bolt, Mibe does think Alpha is viable here.
“Unless the battery cost is significantly lowered, the total cost of the EV cannot be reduced significantly. That’s the reality,” he said. “We are aware that there is a need to provide affordable EVs for the North American market, (but) the 0 Series Alpha size is probably too small.”
Honda and performance cars have been synonymous for decades, including the S2000 roadster and Acura NSX. But don’t expect an EV sports car anytime soon.
“I’m afraid that we will not have any option for you to drive an EV sports car,” said Mibe, though he is bullish on hybrid performance cars like the Prelude. Honda’s hybrid Formula One drivetrain will power the Aston Martin team next year.
Sam Abuelsamid, Telemetry
“We will be driving (with Aston Martin) our power unit — half of which will be engine, half (from) electrification,” he said. “This is the opportunity for us to demonstrate on electrification technology.”
As a stepping stone to its O Series models, Honda collaborated with GM to make its $50,000 Prologue EV. Mibe said such partnerships will be common in the electric era.
“Our first objective in collaborating with GM was to expand the volume so that we could reduce the cost,” the Honda CEO said. “We are continuing to talk with GM. Software development cost is very high. The more partners we work with, the more we can allocate all the development costs, and then all the costs can be absorbed.”
In addition to EVs, Mibe and North American President Kazuhiro Takizawa also pointed to Honda’s off-road and performance vehicles as a source of growth.
Henry Payne, The Detroit News
“With some models, like (Civic’s track-focused) Type R we have a sports image,” said Takizawa. “We really want to enhance our . . . off-road capability for light-truck models. Electrification is not our only challenge. We’re challenging in this field, too.”
Brauer was at the Specialty Equipment Market Association show in Las Vegas when the Japan Show opened: “It’s telling that, the same week Honda is previewing O Series EVs in Tokyo, they are also rolling out new parts from Honda Racing Corporation in Vegas to complement their gas-powered Passport and Civic models.”
Henry Payne is auto critic for The Detroit News. Find him at hpayne@detroitnews.com or Twitter @HenryEPayne.