Honda CEO Toshihiro Mibe has openly admitted that the company is struggling to keep up with the rapid advancements of China’s electric vehicle (EV) industry. His statement comes after a recent visit to a supplier factory in Shanghai, where he witnessed highly automated production lines requiring minimal human labor, yet still delivering fast, low-cost, and high-quality output.
The remarks reflect growing pressure on Honda as competition in the EV market intensifies, particularly in China. The company’s sales performance in the country has weakened significantly in recent years as new domestic EV manufacturers continue to gain market share.
According to reports from Nikkei Asia and CarBuzz, Honda has already faced major setbacks, including the cancellation of three electric vehicle models developed in partnership with Sony for the U.S. market. Executives reportedly admitted that Honda has struggled to produce EVs that offer better value than newer competitors, putting its long-term competitiveness at risk.
The financial impact has been significant, with the company recording substantial losses and implementing cost-cutting measures, including temporary salary reductions for executives. In response, Honda has also begun restructuring its research and development (R&D) division, bringing it back under direct control of the parent company after operating independently for decades.
Mibe, who previously led Honda’s R&D efforts, said the company needs to return to its core strengths and accelerate innovation. He emphasized that Honda must improve development speed, efficiency, and engineering capability to compete effectively against Chinese manufacturers.
Once a dominant player in the Chinese automotive market—selling around 1.6 million vehicles in 2020—Honda now expects sales to fall to approximately 600,000 units this year. Several factories are reportedly operating at only half capacity.
The situation highlights a broader shift in the global auto industry, where Chinese EV makers are rapidly scaling production while traditional automakers like Honda struggle to adapt to faster development cycles and more aggressive cost structures.
