Legacy automakers trim EV bets

Legacy automakers trim EV bets Honda and BMW are both still talking about electric cars. They are just spending on them very differently now. Honda said on March 12, 2026 that it is canceling three electric vehicle models planned for North American production after reassessing its automobile electrification strategy. BMW, by contrast, said on April 2, 2026 that its Munich plant is about to begin series production of the new BMW i3 in August as part of its Neue Klasse electric rollout. (global.honda) That pairing captures where much of the legacy auto industry is landing in 2026. The race is no longer about announcing the biggest electric lineup. It is about deciding which electric programs can earn money soon enough to justify the factory, software, battery, and supply-chain spending they require. (global.honda) Honda’s move is the sharper reversal. The company said the canceled projects were part of a North American electric push that no longer fit the business environment, and it warned that the strategy reset would force it to book losses in the fiscal year ending March 2026. Honda tied the rethink to recent changes in the market, including weaker conditions for electric vehicles, pressure from United States tariff policy on gasoline and hybrid operations, and weaker competitiveness in Asia after more resources were directed to electric development. (global.honda) This was not a sudden one-month panic. Honda had already signaled a retreat in May 2025, when Chief Executive Officer Toshihiro Mibe said the company expected its 2030 global electric vehicle sales ratio to come in below its earlier 30 percent target. In that same briefing, Honda said it would reassess its powertrain mix and lean harder on both hybrid electric vehicles and intelligent driving technology. (global.honda) The wording matters. Honda did not say electric vehicles were a dead end. It said the timing had changed. As recently as 2024, Honda was still describing battery electric vehicles as the long-term answer for small mobility products and planned a seven-model Honda 0 Series global lineup by 2030. By 2025, the company was still saying electrification remained central, but it was also admitting that a slower market and changing regulations required a different launch plan. By March 2026, that reassessment had turned into canceled North American models and a hit to earnings. (global.honda) BMW is taking a different route. It is not backing away from electrification, but it is trying to make the transition look less like a bet-the-company leap and more like a controlled factory upgrade. The Munich plant overhaul is the clearest example. BMW said the site has been extensively modernized and will start series production of the new BMW i3 in August 2026, with the plant set to build only all-electric vehicles from 2027. The company also said the redesign should cut overall production costs at Munich by another 10 percent versus the current vehicle generation. (press.bmwgroup.com) BMW has an easier argument to make because its recent sales gave it cover. The company said it delivered 2,463,715 vehicles in 2025, up 0.5 percent from the prior year, including 642,087 electrified vehicles and 442,072 fully electric vehicles. In Europe, fully electric sales rose 28.2 percent, and BMW said battery electric vehicles accounted for about one quarter of its regional sales there. (press.bmwgroup.com) That does not mean BMW is charging ahead blindly. Its own language keeps stressing a “technology-neutral” strategy, meaning it wants to sell internal combustion, plug-in hybrid, and battery electric models together rather than force customers into one path. That approach lets BMW keep chasing electric growth in markets like Europe while protecting margins in places where demand is softer or charging infrastructure is patchier. (press.bmwgroup.com) So Honda and BMW are not really telling opposite stories. They are showing two versions of the same industry adjustment. Honda is cutting projects that no longer clear the profit bar. BMW is concentrating spending in plants and platforms where it thinks electric demand is strong enough to support the investment. In both cases, the old idea of a broad, rapid electric rollout across every segment is giving way to something narrower: fewer models, tighter capital discipline, and more room for hybrids to carry the business while electric adoption develops unevenly by region. (global.honda) That shift also says something about how legacy carmakers now see hybrids. A hybrid is not the final destination in their climate plans, but it is becoming the financial bridge. For Honda, hybrids help fund the next round of technology spending while the electric market sorts itself out. For BMW, a broader drivetrain mix helps smooth demand swings and preserve pricing power while the Neue Klasse platform rolls out. Neither company is abandoning electrification. Both are trying to avoid burning cash on the assumption that every market will move at the same speed. (global.honda) The result is a more selective electric era. The winners may not be the companies that promised the most electric models first. They may be the ones that can tell, factory by factory and model by model, which electric bets deserve more money and which ones need to wait. (global.honda)