By Daisuke Narahashi
Yomiuri Shimbun Staff Writer
One after another, major Japanese automakers have started revising their EV strategies lately following sluggish global market growth, compounded by uncertainty over sales forecasts for the United States due to the revision of environmental regulations and elimination of support measures by the administration of U.S. President Donald Trump.
While these companies plan to focus on hybrid vehicles (HV) for now, they are having to make difficult investment decisions due to the fact that the EV market is still expected to expand in the future.
Slowdown
"The EV market is slowing down. Delaying full-scale investment in EVs is appropriate," said Subaru Corp. President Atsushi Osaki at the company's earnings briefing on Nov. 10. He also announced a review of its electrification investment plan, which the company had planned to put 1.5 trillion yen into by 2030.
Three hundred billion yen of the fund is already allocated to specific projects. The remaining 1.2 trillion yen will be partially redirected toward hybrid and gasoline vehicles. The launch of four EV models planned for development by 2028 will also be delayed.
Other automakers are also rushing to revise their EV strategies. Honda Motor Co. has reduced its planned EV-related investments from a total of 10 trillion yen to 7 trillion yen. Nissan Motor Co. is delaying the production of new EV models that had been scheduled for 2028.
Loss of U.S. support
Globally, EV sales are sluggish due to factors like delays in charging infrastructure development. In the United States, this trend has worsened with the inauguration of President Trump, who is disinclined to pursue measures to protect the environment.
The Trump administration eliminated EV tax credits worth up to 7,500 dollars in September. According to estimates by U.S. research firm Cox Automotive, EV sales in the United States in October fell 30% year-on-year, halving from September when there was a last-minute demand surge before the end of the tax break.
California, the top EV market in the United States, had planned to ban the sale of new gasoline vehicles by 2035, but Trump signed a congressional resolution in June to nullify this rule.
Since automakers had been focusing their development efforts on meeting California's standards, an executive at one major automaker said, "There's no longer a need to force the production of low-margin EVs."
Emissions regulations have also been relaxed. Mazda Motor Corp. and Mitsubishi Motors Corp., which had purchased surplus emission credits from other companies to avoid fines, recorded impairment losses on these credits in their September 2025 interim consolidated financial statements due to their decreased value.
Cost sharing
With EVs losing momentum, attention is turning to HVs, which are a specialty of Japanese automakers. Toyota Motor Corp. announced earlier this month that it will make a 912 million-dollar (approximately 140 billion-yen) investment in its U.S. plants to boost HV production. Nissan will debut its first next-generation hybrid in the United States in fiscal 2026.
However, EVs are expected to see widespread adoption in the future, meaning automakers cannot neglect EV development. Consequently, these companies plan to continue to make a certain amount of investment in areas like vehicle batteries and software development.
Masahiro Fukuda of research firm Fourin Inc. pointed out, "To avoid falling behind emerging players from China and the United States, Japanese automakers need a strategy to deepen inter-company collaboration and share EV development costs."
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This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.
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November 27, 2025 05:53 ET (10:53 GMT)
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