Honda invests €2.6 billion in hybrids and builds a new US car plant
Honda is betting on growing demand for hybrid cars, investing approximately €2.6 billion in a new factory in the US state of Ohio. Scheduled to open in 2029, the plant will be able to produce up to 240,000 cars a year and will create more than 2,000 jobs. Honda is also expanding hybrid powertrain production at existing factories, increasing capacity at its Ohio transmission plant by as much as 250%.
New plant to produce cars with different powertrains
Honda is building the new factory between its existing production facilities in Marysville and East Liberty.
Its annual production capacity of 240,000 cars will bring the combined capacity of Honda's US plants to approximately 1.3 million vehicles.
A distinctive feature of the new plant is its flexible production setup. Hybrid, petrol and fully electric cars can all be built on the same production lines. This will allow Honda to adjust production volumes to demand without having to build a separate factory for each powertrain type.
Hybrid production capacity to increase by 250%
The investment extends beyond the new factory. Honda is also upgrading existing production facilities in Ohio, Alabama and Georgia.
The Alabama plant will produce a new V6 hybrid powertrain for larger vehicles. At its Anna engine plant in Ohio, Honda is preparing to produce a next-generation four-cylinder Atkinson-cycle petrol engine.
At its Ohio transmission plant, the company will begin producing two new hybrid systems. One is suited to compact and mid-size models, the other to larger cars. The Georgia plant will also produce the same technology in future.
Honda's current two-motor hybrid system is used in models including the Civic, Accord and CR-V. Production of the next-generation system will begin in 2027.
Honda prepares 15 new hybrid models
Honda plans to launch 15 new hybrid models under the Honda and Acura brands by 2030.
North America will be their main target market. The company is developing new models in California and Ohio and wants to link development work more closely with local factories.
Honda is also expanding production capacity in Canada, where the Alliston plant is preparing to build next-generation hybrid and petrol cars.
A more pragmatic strategy than an electric-car focus
Honda's investment signals a significant shift in automotive industry priorities.
The company has scaled back its electric car plans and is focusing more attention on hybrids, for which demand remains strong in North America. Honda is not abandoning electric cars, however, as the new factory will also be able to build fully electric models if needed.
In Europe, Honda's hybrids compete primarily with electrified models from Toyota, Renault and Hyundai. Toyota has spent decades developing hybrid technology, and Honda must deliver at least comparable fuel efficiency with its next-generation systems.
The real strength of Honda's decision lies in production flexibility. The company is not tying the new factory to a single powertrain technology, leaving itself the option to adapt production as the market develops.
This reduces risk at a time when demand for electric cars and the popularity of hybrids are developing at different rates across the world's regions.
