As with many other car manufacturers, Honda has scaled back its EV ambitions. Last year, it allocated 10 trillion yen ($68 billion) for electrification, only to cut that by 30 percent a few months ago. The company had also aimed for purely electric cars to account for 30 percent of annual sales by the end of the decade, but that target is no longer in place. In a new statement, Honda makes it clear it doesn’t see EVs as the only route to carbon neutrality.
To be clear, Honda still stands by its goal to “achieve carbon neutrality for all products and corporate activities” by 2050. But as the old saying goes, it believes there’s more than one way to skin a cat. Speaking with Australia’s Drive magazine, the head of the company’s local arm suggested EVs aren’t the only solution to reducing carbon emissions. Recently appointed Honda Australia CEO Jay Joseph explained:
Photo by: Honda
“A point I want to make with that is that EVs are not the goal. Battery-electric vehicles are a pathway to achieving carbon neutral – not necessarily the only pathway. EVs will continue to improve – we’re working on solid-state batteries – but our goal is carbon neutral, not battery-electric vehicles. That’s just the obvious pathway in the near to mid-term, but we’ll develop other technologies that help achieve that as well. We would like that to include electrified fuel cell vehicles when the infrastructure is there.”
While the Clarity has come and gone, Honda hasn’t abandoned hydrogen. The CR-V e:FCEV is a fuel cell vehicle with a twist, doubling as a plug-in hybrid thanks to a rechargeable 17.7-kWh battery pack offering 29 miles of electric range. Toyota and Hyundai also remain committed to hydrogen, and even BMW plans to launch a fuel cell vehicle in 2028 with help from Toyota. By contrast, Stellantis recently abandoned all hydrogen efforts, calling it a “niche segment.”
Fellow Japanese brand Toyota believes there’s room for even more powertrain diversity. The world’s largest automaker is convinced hydrogen-burning combustion engines could serve as an alternative to going all-in on battery EVs. Together with domestic partners Mazda and Subaru, it’s developing carbon-neutral engines capable of running on liquid hydrogen, biofuel, and synthetic fuel.
Hydrogen refueling infrastructure is severely underdeveloped
That said, the elephant in the room remains infrastructure, or the lack thereof. Any type of hydrogen-powered vehicle would be difficult to own given how underdeveloped the fueling network is. According to H2stations.org, only about 1,160 refueling stations were operational globally at the end of last year. Infrastructure for synthetic fuels is practically nonexistent, with only a few exceptions, such as Porsche’s pilot plant in Chile.
Some would argue automakers are beating a dead horse with hydrogen and synthetic fuels, but others remain skeptical that battery EVs are the ultimate answer. One of the most controversial claims comes from Toyota chairman Akio Toyoda. In early 2024, he predicted that traditional EVs would never exceed a 30-percent market share. But all signs suggest he may be proven wrong in the not-too-distant future, as battery EVs continue to gain traction.
The International Energy Agency (IEA) reports that conventional electric cars made up over 20 percent of global sales in 2024 and are on track to surpass 25 percent this year. While China largely drives demand, Europe is also making substantial gains. According to the European Automobile Manufacturers’ Association, EVs accounted for 17.5 percent of new car sales in the first half of 2025, up from 13.9 percent in the same period last year.
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