In a year already full of pivotal moments for climate policy and transportation, the global auto industry is facing a critical juncture. From regulatory pushback in the U.S. to shifting corporate strategies like Honda’s recent decision to scale back on electric vehicle (EV) investments in favor of hybrids, the future of clean transportation is being hotly debated.

What does this mean for consumers, governments, and automakers? Is the EV revolution stalling or simply evolving? Here’s an expert analysis on the state of the EV and hybrid vehicle market, the environmental impact, and whether these technologies still represent the future of mobility.

Image: Mike Bird

A Global Reality Check: Where Do EVs Stand in 2025?

The global push for electrification surged through the 2010s and early 2020s, spurred by climate goals, technological advances, and tightening emissions standards. But in 2024 and 2025, enthusiasm has cooled in some regions. According to Bloomberg, global EV sales growth has slowed to around 25% in 2025, compared to over 55% growth in 2022. Market saturation in key segments, rising interest rates, lagging infrastructure, and consumer anxiety over charging availability are contributing factors.

In the U.S., electric vehicles account for roughly 9% of new car sales, while hybrids make up another 11%. In contrast, EV adoption in Europe and China is higher, particularly in Norway and the Netherlands, where government incentives remain strong.

Image: Tom Swinnen

Honda’s Pivot Reflects a Broader Trend

Honda’s recent announcement that it will scale back EV investment by $16.6 billion and double down on hybrid development is not an isolated event, it’s a bellwether. Toyota, Mazda, and several American automakers have echoed similar sentiments. The reasoning is simple: while EVs are the end goal, hybrids serve as a more feasible transitional technology, especially in markets where charging infrastructure is sparse and energy grids are still carbon-intensive.

Honda now aims for only 20% of its global sales to be EVs by 2030, down from a previous target of 30%. Instead, it plans to roll out 13 new hybrid models by 2027, citing their affordability, accessibility, and scalability.

EVs vs. Hybrids vs. ICE: What’s the Difference?

Environmental Impact: Do EVs and Hybrids Actually Help?

Yes… but with nuance.

• EVs have zero tailpipe emissions. Over their full lifecycle (including manufacturing and battery production), they emit 60–70% fewer greenhouse gases than ICE vehicles, according to the International Council on Clean Transportation (ICCT). The benefit increases as grids decarbonize.

• Hybrids reduce emissions by 20–35% compared to traditional gasoline vehicles, primarily by optimizing fuel usage and recapturing energy through regenerative braking.

• Plug-in hybrids (PHEVs) perform better, up to 60% fewer emissions, if drivers use them predominantly in electric mode.

However, the carbon footprint of battery production, particularly lithium, cobalt, and nickel mining, raises sustainability concerns. The environmental return on EVs improves only after thousands of miles of driving, which offsets manufacturing emissions.

Image: Kindel Media

The Pros and Cons of EVs and Hybrids

EVs – Pros

• Zero tailpipe emissions – Ideal for urban air quality and long-term climate goals.

• Lower operating costs – Electricity is cheaper than gasoline, and EVs require less maintenance (no oil changes, fewer moving parts).

• Quiet and smooth drive – Instant torque and fewer vibrations improve the driving experience.

• Incentives and tax breaks – Still available in many regions.

EVs – Cons

• Charging infrastructure gaps – Especially in rural and developing areas.

• Longer refueling time – Fast chargers help, but aren’t universally available.

• High upfront cost – Though dropping, batteries still drive EV prices above ICE in many markets.

• Battery concerns – Degradation over time, recycling challenges, and mineral sourcing issues.

Hybrids – Pros

• Fuel efficiency – Especially in city driving where electric motors dominate.

• Lower emissions than ICE – Without infrastructure dependence.

• Affordable entry point – More cost-effective than full EVs.

Hybrids – Cons

• Still emit carbon – Not a long-term climate solution.

• Mechanical complexity – Two propulsion systems mean more maintenance points than EVs.

• Less impactful – Not as transformative as full EVs in terms of emissions reduction.

Image: Magda Ehlers

Is There a Big Future for EVs and Hybrids?

The Short Answer: Yes, but not equally and not everywhere.

EVs are inevitable. Most major automakers, from GM and Ford to Volkswagen and BYD, are still investing heavily in EV platforms. The market trajectory points toward mass electrification over the next two decades, with EVs projected to account for 40–50% of global new car sales by 2035, according to the International Energy Agency (IEA). Battery costs are falling, charging networks are growing, and consumer awareness is increasing.

Hybrids, on the other hand, are likely to see a strong decade of relevance. They serve as a vital stepping stone, especially in countries where full EV adoption is still a distant goal. By 2030, hybrid sales are projected to peak, after which they may decline as pure EVs become dominant.

The Road Ahead

The global transition to cleaner vehicles is neither linear nor uniform. It will require a layered approach: EVs, hybrids, and infrastructure reform all working in tandem. Honda’s pivot is not a retreat from electrification, but rather a strategic pause to accommodate market realities.

For consumers, the takeaway is clear: both EVs and hybrids offer meaningful advantages over traditional vehicles, with EVs leading on long-term environmental and economic benefits. Policymakers, however, must ensure that regulatory frameworks, grid investments, and incentives evolve just as dynamically as the technologies they aim to support.

References

• Reuters (2025). Honda scales back EV plans to focus on hybrids. • BloombergNEF (2025). EV Outlook Report. • International Energy Agency (IEA). Global EV Outlook 2024. • International Council on Clean Transportation (ICCT). Lifecycle emissions from EVs vs ICE. • U.S. Department of Energy. Benefits and considerations of hybrid and electric vehicles. • CleanTechnica. Battery cost trends and future projections.