As BEV enters, hybrid remains key: Honda

HONDA Australia will not abandon its long-standing Hybrid First electrification strategy despite conceding the battery-electric vehicle market has moved faster than it anticipated over the past 12 months.

Speaking with GoAuto at the Australian launch of Honda’s first locally offered battery-electric model, the Super-One city hatch, company executives said rapidly changing market conditions would require some adjustment to its product plans, but not a fundamental change in direction.

Honda has deliberately taken a measured approach to battery-electric vehicles in Australia, instead progressively expanding its petrol-electric hybrid range to the point where approximately 90 per cent of its local sales volume is now hybrid.

The strategy contrasts with several newer entrants that have moved aggressively into battery-electric and plug-in hybrid vehicles, particularly as Australia’s New Vehicle Efficiency Standard (NVES) begins to influence product planning and powertrain mix.

However, Honda Australia maintains that introducing electrified vehicles simply because a particular technology is gaining momentum is not necessarily the right approach.

“A long time ago, we’d set about a strategy on how to tackle the new energy market, and our strategy has always been hybrid first and going into EVs when the product available and when it made sense,” Honda Australia director Robert Thorp told GoAuto.

“And this year was really the big transition year where the majority of our line-up now is hybrid only, and in fact right now roughly 90 per cent of our volume is hybrid.

“The Super-One is our first EV here because it ticks so many boxes for us. It was the right product that was available, and it was the right product that we thought would be successful in this market.”

Honda Australia acknowledged that other battery-electric models available within Honda’s global portfolio had previously been considered for Australia but said neither the vehicles nor market conditions were considered suitable at the time.

“There have been others in the Honda stable in years gone by, and for various reasons, we weren’t able to bring them to market,” added Mr Thorp.

“But at the same time, we didn’t also want to bring them to market because obviously we didn’t think the market was ready and it wasn’t going to make sense.”

Significantly, Honda conceded the Australian electrified-vehicle market has changed more rapidly than it had anticipated – a development that may require some recalibration of its local plans.

“The last 12 months, clearly a lot has changed, and certainly the landscape’s moved maybe a bit quicker than what we had originally anticipated,” admitted Mr Thorp.

“But it doesn’t necessarily negate from what our long-term strategy is and the path that we’ve taken so far.

“The milestones we’ve achieved this year are still heading in the right direction, and we have belief that our long-term aspiration is still the right way.

“So, our strategy isn’t fundamentally changing because of what’s happened this year. Certainly, we have to tweak it and counter what’s happening in the market. We’re not blind to that. But our approach isn’t fundamentally changing.”

The comments come as Honda Australia begins what could become a broader expansion of its electrified model range.

Asked how much influence the Australian operation could exert over its Japanese parent should rapidly changing market conditions require additional EVs sooner than previously planned, Honda conceded securing suitable product is not a straightforward process.

“They’re not easy conversations. You just can’t suddenly turn on a vehicle and turn it on and have it available in the market tomorrow,” said Honda Australia CEO and president Jay Joseph.

“But what I will say is that Honda Motor is very, very supportive in ensuring that we have the right product lineup here in Australia.

“And yes, it is conversations about EV, it’s conversations about other hybrids. It is conversations about new segments, and new opportunities. It’s not purely just EVs for us.

“It’s trying to find a blend that works,” he said.

Honda Australia said customer demand would remain central to those decisions, rather than simply adding battery-electric vehicles to satisfy broader market trends.

“At the end of the day, we’ve got to find customers that want them as well,” added Mr Joseph.

“It’s not purely about just pre-enabling the market, because that’s what’s hot.

“What’s most important is finding what works for us as a portfolio, what works for our network, and what’s ultimately going to resonate with customers.”

Honda’s Australian electrification strategy has increasingly centred on conventional hybrids, with petrol-electric powertrains progressively extended across models including Civic, HR-V, ZR-V, and CR-V.

The company told this masthead that making hybrid technology more accessible had helped shift buyers toward electrified models, leaving relatively few petrol-only variants in its current range.

Honda Australia executives said the transition demonstrated one of the key advantages of conventional hybrids – they require virtually no behavioural change from customers compared with an internal-combustion vehicle.

“Now 90 per cent of what we’re selling here in Australia is hybrid, which is a small number of petrol trim-level models and certain models, and obviously the Civic Type R, which is relatively low volume,” said Mr Thorp.

“So yes, it’s certainly become more accessible to consumers, and it’s a better value proposition.”

Honda Australia also indicated it intends to continue improving the efficiency, performance, and affordability of its hybrid technology as successive generations arrive.

“If you look over time, each generation of our hybrids, starting with IMA, going to IMMD, first Dreams generation, now the current generation, each generation has been more efficient,” added Mr Thorp.

“Obviously, fuel economy and emissions reductions are the reasons that we developed hybrids originally 25 years ago and brought them to market 20 years ago. Those are paramount.

“But it’s also really important that the drivability is second to none. It has to be superior to a petrol (powered) car, and we’ve made big advances in that with each successive generation.

“We also have to get the cost down. It has to be more attainable.”

Honda Australia would not yet confirm whether the latest generation of its hybrid technology – including developments destined for overseas versions of the CR-V – will arrive locally or on what timetable.

For now, however, the company appears intent on maintaining a technology mix led overwhelmingly by conventional hybrids, while using Super-One to establish its battery-electric credentials and potentially pave the way for additional EVs.

And despite admitting the speed of change in Australia’s electrified vehicle market caught it somewhat by surprise, Honda maintains its measured approach remains the appropriate one – albeit with some fine tuning as competitive and regulatory pressures continue to intensify.