- Honda has reportedly pulled the plug on its 2027 large electric SUV.
- The model was one of seven new EVs planned for launch by 2030.
- Honda is said to have cut a significant portion of its EV development budget to go toward hybrids.
Faced with the imminent crumbling of the federal tax credit and cooling EV demand in the United States, Honda has reportedly pulled the plug on its plan to launch a large (likely three-row) electric SUV. The model was expected to debut in 2027 as a rival to the Kia EV9, and it was one of the seven new fully electric models that Honda said it would launch by the end of the decade.
Nikkei quotes unnamed company insiders who confirmed the change of plan, which may include the cutting of additional planned EVs. While Honda seems primed to bring the 0 Series Saloon and 0 Series SUV to market, it's slowing down on additional models for now, such as this larger three-row SUV.
They say this is the result of a broader move by Honda to reduce EV development spending and shift funds toward hybrids instead. It's unclear whether the timing was coincidental or not, but this report emerged quickly after President Donald Trump signed his Big Beautiful Bill into law, which ends the $7,500 U.S. EV tax credits.
Regardless of timing, the source states that this U.S. policy shift regarding EVs and the general slowdown in demand played a big part in the decision. Losing the tax credit is expected to diminish EV demand in the U.S.
Honda is reportedly reducing its initially planned EV investment from $68.7 billion to $48.1 billion. The difference will go toward the development of new and improved hybrids, which have seen a surge in demand not only in the U.S. but also in Europe and other major markets. Honda is doing this to ensure the company’s profitability and to future-proof its business against fluctuating demand for pure electric vehicles.
While Honda hasn’t officially confirmed the news, it aligns with what other manufacturers have been doing over the past year. Most have backtracked on their lofty goals to go completely electric by the end of the decade or by 2035, after emphatically announcing that they were completely reevaluating their business and ditching combustion engines as soon as possible.
Last year, Ford also cancelled its plan to launch a large three-row electric SUV with a 350-mile range, which was supposed to arrive sometime this year. It initially announced that it was delaying its launch from 2025 until 2027, but then said it wasn’t coming at all. Just like Honda and others, Ford said it was reshuffling its resources to invest more in hybrid vehicle development.
It looks like combustion will stick around for much longer than previous plans suggested, especially in the U.S., where the demise of the EV tax credit is just one prong of a strong anti-EV movement within the government. The Trump administration has also moved to abolish California’s ZEV mandate (which planned to end the sale of pure combustion-powered vehicles by 2035). California and 10 other states are suing the federal government over the move.
Nobody wants a $70,000 electric behemoth when a midsize hybrid crossover does the same job for half the price, when there's a gas station on every corner, it seems. As good as vehicles like the Kia EV9 and others in its class are, and there are some fantastically fancy and capable large EV SUVs, it seems buyers aren’t snapping them up as the manufacturers would have hoped.
Even so, we will still thankfully get to see the production models previewed by the two striking Honda concepts, whose unusual look may help them become more popular than if they were conservatively styled. Honda currently only sells one EV in the United States, the Prologue, which is manufactured by General Motors, which was one of 2024’s best-selling GM EVs.
