Subaru has announced it will reduce its investment in electric vehicles (EVs) and shift its focus toward expanding hybrid development, citing declining demand for EVs.
During its latest earnings presentation, as reported by Nikkei Asia, Subaru President Atsushi Osaki said the company is reviewing the ¥1.5 trillion it had planned to invest in electrification, despite having already invested over ¥300 billion.
Osaki stated, “With growing demand for hybrids and a renewed evaluation of internal combustion engines, it is appropriate to delay full-scale investment in EV mass production.”
Subaru’s previous investment plan aimed to launch eight EVs globally by 2028. Its plan to introduce four EVs co-developed with Toyota by the end of 2026 will proceed, but other EVs—especially those Subaru intended to develop in-house—may be postponed. However, Osaki emphasized that the total investment amount will not be reduced, but rather reallocated to other areas, with details yet to be disclosed.
Beyond slowing EV sales, Subaru is also adjusting its strategy due to changes in government policy, particularly in the United States, which accounts for more than 70% of the brand’s global sales.
On September 30, 2025, the U.S. government under President Trump ended EV purchase incentives of up to US$7500, prompting several Japanese manufacturers to revise their plans. Toyota recently announced a delay in building its EV plant in Fukuoka to 2028, while Nissan cancelled plans for an EV battery plant in Fukuoka in May due to profit concerns and financial challenges.
Subaru, meanwhile, announced that it will reconfigure one of its largest Japanese factories to produce petrol, hybrid, and electric vehicles on the same production line, allowing greater flexibility based on shifting market demand.
Osaki added that Subaru will expand its product lineup to meet diverse needs, with many upcoming models expected to be hybrids or combustion-powered rather than full EVs.
Subaru has also reaffirmed its commitment to internal combustion engines for as long as possible, as part of a collaboration with Toyota and Mazda to develop lower-emission engines using hybrid technology and synthetic fuels. Subaru’s newer hybrid models, such as the Forester Hybrid and Crosstrek Hybrid, already use Toyota’s technology, while its previous hybrid system remains in the Impreza and Rex in Japan. Currently, Subaru has only one EV—the Solterra—but it will be joined by the Trailseeker, Uncharted, and another unnamed Toyota-shared model before the end of 2026.
Subaru is not alone in scaling back EV plans, despite already being slow to enter the EV market. Earlier this year, Honda cut its EV development budget by 30%, Volkswagen temporarily halted EV production due to slower-than-expected sales, Porsche revised its EV strategy to include more combustion models, and Volvo and Genesis both dropped their goals of becoming EV-only brands by 2030.
Source: CarExpert
