On the Dash:
- Honda plans to boost production of lower-priced, gas-powered vehicles in the U.S. as affordability concerns outweigh demand for electrified models.
- The shift comes as the Trump administration relaxes fuel-economy standards and gasoline prices fall, eroding the near-term cost advantage of hybrids.
- Honda expects U.S. sales across its Honda and Acura brands to rise about 4% in 2025, despite an uncertain pricing environment.
Honda plans to increase U.S. production of lower-priced gasoline-powered vehicles this year, shifting away from electrified models as high vehicle prices and easing emissions standards reshape consumer demand.
The Japanese automaker will prioritize gas-powered cars and sport utility vehicles to meet growing demand for more affordable models, Lance Woelfer, head of Honda’s U.S. sales operations, said during a media briefing. The move comes as many American car buyers continue to struggle with new-vehicle prices that average nearly $50,000.
Honda’s shift also reflects a changing regulatory environment as President Trump’s administration is rolling back Corporate Average Fuel Economy standards for cars and light trucks that were tightened under former President Biden, giving automakers greater flexibility to emphasize internal combustion engine vehicles.
Hybrids made up a significant share of Honda’s top-selling models last year, accounting for 54% of CR-V crossovers, about half of Accord sedans, and 36% of Civic compacts. However, hybrids typically carry higher upfront costs, which buyers may find harder to justify as gasoline prices decline. In many parts of the U.S., fuel prices have fallen to their lowest levels in at least a year, according to government data.
Pricing differences underscore the affordability gap as a 2026 gas-powered Honda CR-V starts at about $32,370 in the U.S., roughly $5,000 less than the least expensive hybrid version, according to Edmunds. While the hybrid offers about 10 miles per gallon better fuel economy than the gas-only model, the savings may take longer to offset the higher purchase price.
According to Edmunds, a clear affordability gap is evident, as highlighted by pricing. The starting price for the 2026 gas-powered Honda CR-V in the U.S. is approximately $32,370, about $5,000 less than the least expensive hybrid version. Although the hybrid version boasts about 10 miles per gallon better fuel economy than its gas-only counterpart, the higher initial cost means it could take owners longer to recoup the difference through fuel savings.
The production shift highlights the broader challenge facing automakers as they balance long-term electrification goals with near-term affordability concerns in a price-sensitive market.
