The electric vehicle landscape in the United States is shifting rapidly, and Honda is adjusting its course. Faced with the likely end of federal EV tax credits and a cooling demand for all-electric vehicles, the Japanese automaker has reportedly put plans for a large three-row electric SUV on hold.
Originally expected to launch in 2027, the Honda model was intended to compete directly with the Kia EV9. According to the Nikkei business daily, unnamed sources within the company confirmed that Honda is rethinking several EV projects, including this full-size SUV, which was one of seven all-electric models the brand had pledged to launch by the end of the decade.
This move is part of a strategic shift. Honda is now set to slash its EV development budget from $68.7 billion to $48.1 billion, with the difference going toward developing new and improved hybrid models. Hybrids are seeing a strong surge in popularity, not just in the United States, but also across Europe and other major markets.
While Honda continues work on its upcoming “0 Series” sedan and SUV, the pace for other EVs has slowed. The decision to pull back comes just days after President Trump signed the “Big Beautiful Bill”, effectively eliminating the $7,500 federal EV tax credit. Honda Isn’t Alone in This Honda isn’t the only automaker adjusting its EV ambitions.
Ford recently canceled a planned three-row electric SUV, originally scheduled for 2025. After initially postponing it to 2027, the company later confirmed it would not be moving forward at all. Like Honda, Ford is also redirecting investment toward hybrid vehicle development. The reality is definitely clear: consumers aren’t rushing to buy $70,000 electric SUVs, especially when midsize hybrids offer similar utility at half the cost, and with gas stations on nearly every corner.
Honda hasn’t officially confirmed the reports, but the strategic shift is in line with industry trends. Automakers (in general) are stepping back from ambitious EV-only goals, prioritizing financial sustainability and market flexibility. Honda doesn’t lose its presence in the EV space: the Prologue, built in partnership with General Motors, became one of GM’s top-selling electric vehicles in 2024.
