Honda has made the shock announcement that it’s cancelling its much-hyped 0-Series electric car models – which would have been an impressively sleek shovel-nosed saloon and a cool-looking mid-size SUV – as it says that not enough people are buying EVs.
That last statement is pointedly aimed at the United States market, which has long been of supreme importance to Honda, and the Japanese company is laying the blame for the fall-off in American EV sales right at the door of US president Donald Trump’s White House.
While Trump persists in his war with Iran, driving up fuel prices around the world, his administration has also removed most of the incentives for buying a new electric car, with sales consequently falling by 36 per cent at the end of 2025, according to market watcher Kelley Blue Book.
According to its official statement, Honda said that: “[We] determined that starting production and sales of these three models in the current business environment, where the demand for EVs is declining significantly, would likely result in further losses over the long term.”
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Honda will now have to take a large financial hit related to writing down and writing off the cost of the development of the 0-Series cars, as well as the related Acura RSX. The expectation is that cost will lead to a loss of as much as €3 billion, with further losses to come in 2026 and 2027.
Honda’s woes aren’t only down to the US government’s decision to rescind EV incentives. The company admits it has also been flummoxed by intensive competition from China in the EV sphere, noting that Chinese carmakers have been able to “leverage their short product development cycles, which has intensified the competition”.
Honda has even candidly admitted that it has suffered from a loss of overall product competitiveness, especially as buyers are seemingly deserting the core values that made Honda great – reliability, quality, and fuel economy – in favour of shinier touchscreens and software updates.
The Japanese company has said it will retrench its efforts, focusing on its core hybrid models, and putting its efforts into the US and European markets.
It was similarly bleak news from Volkswagen.
Like its rivals, the German car giant has contended with pressures across significant markets, with US tariffs costing the company billions and local competition eroding its share in China, the world’s biggest car market.
War in the Middle East is also testing the group’s nerves, threatening luxury-car demand at a time when Audi and Porsche are already grappling with weaker sales and tighter margins.
“We are noticing that the business model that carried us for decades no longer works in this form,” said chief executive Oliver Blume. “We are simply seeing how volatile and fragile our world is, with new issues arising every month.”
The group plans to make about 50,000 job cuts by 2030 in Germany.
[ EVs ‘cheaper than diesel cars’ on second-hand market for first timeOpens in new window ]
Yet it is still planning for EVs in the future. Volkswagen has confirmed that the ID.3 electric hatchback is due for a big upgrade later this year, which will include a new, more high-tech digital instrument panel as well as styling tweaks, a one-pedal driving mode, bidirectional charging, and some battery and motor updates, which will liberate a little more range. This updated ID.3 is new enough to receive a new name: ID.3 Neo.
It’s part of a general strategy at VW to start giving its EV models names rather than numbers, hence the new compact ID. Polo and ID. Cross, as well as an imminent name change for the ID.4, which will become the ID. Tiguan.
There’s more good news for electric car buyers across Europe, as research from eco think tank Transport & Environment (T&E) shows that the average price of a new EV has fallen by €1,800 this year, the first time that the average price has come down since 2020, and which T&E says is driven by a recent glut of much more affordable EV models. – Additional reporting: Reuters
