Environment
Another Japanese automaker is pushing back its EV plans, blaming slower sales
Subaru joins Toyota and Honda as the latest major Japanese automaker that plans to delay key EV projects to focus on hybrids.
Subaru shifts EV plans to focus on hybrids and ICE
Japanese automakers have been among the slowest to join the global shift to electric cars, insisting on focusing on hybrids and internal combustion engine (ICE) models.
After reporting its second-quarter earnings this week, Subaru said it’s adjusting its planned 1.5 trillion yen ($9.7 billion) investment dedicated to EVs.
Instead, Subaru is dedicating some of the funds initially planned for EVs to developing new hybrid and ICE vehicles.
“Given the increasing demand for hybrids and the reappraisal of internal combustion engines, it is appropriate to delay the timing of full-scale EV mass production investment,” Subaru’s president, Atusushi Osaki, said during the company’s Q2 earnings briefing earlier this week (via Nikkei).
Subaru has already invested 300 billion yen ($1.9 billion) of the planned funding. The remaining 1.2 trillion yen ($7.8 billion) is under review.
The company plans to increase spending on hybrid and ICE vehicles, and potentially on new vehicle types. Despite the shake-up, Subaru’s plans to launch four new electric SUVs through its partnership with Toyota remain on track for launch by the end of 2026.
After launching the new Forester in Japan earlier this year, powered by Toyota’s hybrid tech and its in-house engine design, Subaru said it’s seeing strong demand for hybrids.
Subaru’s profit took a 154.4 billion yen ($1 billion) hit from the Trump Administration’s new auto tariffs. In response to the changes, Subaru is taking countermeasures to cut costs by 200 billion yen ($1.3 billion) by 2030.
Subaru joins Toyota and Honda as the latest Japanese automaker to postpone EV plans. Toyota announced last week it’s delaying plans to build a new EV battery plant in Japan for the second time. The plant is scheduled to begin producing Toyota’s next-gen batteries in 2028.
Electrek’s Take
Despite media headlines pushing that EV sales are “cooling” or “slowing,” drivers are still switching to electric. According to market research firm Rho Motion, global EV sales rose to 1.9 million last month, up 8% from October 2024.
In the first 10 months of 2025, EV sales growth reached 23%, with notable increases in Europe (+32%), China (+22%), North America (+4%), and the rest of the world (+48%).
By pushing back or canceling plans altogether, automakers are betting against the inevitable. Although Ford has canceled or delayed several major electric vehicle initiatives, CEO Jim Farley admitted during a new episode of the Office Hours: Business Edition podcast that the company “can’t walk away from EVs.”
Not just in the US, Farley warned, “if we want to be a global company, I’m not going to just cede that to the Chinese.”
Farley has warned several times now that Chinese EV makers pose an “existential threat” to global automakers, including itself. For this reason, Ford is betting on smaller, more affordable models to stay competitive.
Are automakers just looking for an excuse to cut costs and please investors? Either way, they will only fall further behind China and others racing to advance new EV tech.
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