Source: SourceAuto

Honda China plans to reduce its investment in pure electric vehicles and software by 3 trillion yen from March 2027 to March 2031, equivalent to approximately 146.7 billion yuan.

"Given the current slowdown in global electric vehicle market growth, Honda will adjust its product investment plans, anticipating that pure electric vehicles will account for a lower global sales share in 2030 than the previously targeted 30%," Honda China announced recently.

Globally, this forecast has a solid foundation, but the domestic auto market is poised to follow a distinct growth trajectory, aligning with broader industry trends. During the China Electric Vehicle Hundred People Forum (2025) on February 25, 2025, Ouyang Minggao, academician of the Chinese Academy of Sciences and vice chairman of the forum, predicted that China would witness a significant surge in the new energy revolution by 2030.

"Pure electric passenger vehicles will comprise over 70% of new car sales," Ouyang Minggao stated.

The electric vehicle markets in China and abroad are moving in opposite directions. It is understandable for Honda to align its strategy with the overseas market, which accounts for the majority of its sales. However, the situation for Honda's two domestic joint venture automakers is somewhat precarious, particularly Guangzhou Automobile Honda, which recently launched its high-profile pure electric vehicle, the P7, receiving over 5,000 orders within 24 hours of its debut.

Regarding Honda China's officially announced strategic adjustment, a source close to Guangzhou Automobile Honda told SourceAuto on May 23 that the company's strategy of "advancing both fuel and electric vehicles" remains unchanged.

Guangzhou Automobile Honda's commitment to penetrating the domestic electric vehicle market is evident in its P7 model.

Similar to many Honda models introduced in China, the Guangzhou Automobile Honda P7 has a twin model, the Dongfeng Honda S7. The two vehicles differ slightly in appearance, but the P7's listed guidance price is 60,000 yuan lower than that of the S7, prompting Dongfeng Honda to swiftly implement a fixed-price policy and offer price difference compensation to existing customers.

This 60,000 yuan price gap between the twin models of Guangzhou Automobile Honda and Dongfeng Honda marks a historic first. Some sources suggest that Dongfeng Honda's initial starting price of 259,900 yuan for the S7 was set in comparison to the Tesla Model Y, but market response fell well below expectations. Consequently, Guangzhou Automobile Honda took decisive measures to reduce prices.

"Even if it means incurring losses, what choice do we have? Let's just get on the table first," a source familiar with Honda told SourceAuto on May 27.

Returning to the product itself, the Guangzhou Automobile Honda P7, which SourceAuto has thoroughly tested, demonstrates unprecedented sincerity at the product level. In terms of performance, the P7 represents the pinnacle of Honda's domestically sold models, incorporating the highest-level elements ever seen in Honda's history in China, including a front double wishbone and rear multi-link chassis specification, as well as premium cabin features like ventilated and heated front and rear seats and electronic exterior rearview mirrors.

The Guangzhou Automobile Honda P7 embodies a determination to draw a clear line with Honda's fuel-era vehicles, both inside and out. This resolve is also reflected in its starting price of 199,900 yuan.

For Guangzhou Automobile Honda, the P7 marks a promising beginning for its electrification transformation, but the journey ahead remains lengthy. Perhaps by following the footsteps of fellow automakers such as Guangzhou Automobile Toyota and Dongfeng Nissan, and accelerating market penetration with the assistance of domestic intelligent suppliers and joint venture Chinese resources, Guangzhou Automobile Honda can find a viable path forward.

In this context, while officially announcing the reduction in electric vehicle investment, Honda China also shared good news – all future models launched in the Chinese market will be equipped with a new generation of ADAS jointly developed by Honda and Momenta, the Chinese intelligent driving company with which both Guangzhou Automobile Toyota and Dongfeng Nissan collaborate.

To advance both fuel and electric vehicles, Guangzhou Automobile Honda needs to accelerate its pace.

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