Banner Vehicles Dec2024 1

Auto Company Strategy in 2025 - Part 1


Honda & Nissan TogetherAutomotive trends are subject to more change than ever, so what was true a year ago may not be true anymore.

Many of the global auto companies are rethinking their product offerings for 2025 and beyond. Honda, Nissan and Mitsubishi are three Japanese brands that have been around for a long time and are planning to work together to weather the storm created by the up and coming competition from the bunch of cheaper priced China-based brands.

There is regulatory uncertainty, and slower-than-expected EV adoption that have forced these companies and others to rework their strategy in a new and more profitable direction. So what are these adjustments likely to be?

1. More focus on hybrid vehicles.

If you think about it, a Hybrid is like betting on a horse to either win or place in the race. EVs sales are not meeting expectations and the rush to make EV’s the norm by 2030, by world governments is looking likely to fail. Designing and building a more eco-friendly hybrid vehicle can help automakers comply to tighter emission regulations, while still appealing to buyers seeking affordability, practicability and improved fuel economy.

Hybrid TechnologiesThe auto companies will have to respond to consumer demand for more hybrid vehicles as they prepare for potential changes to emission regulations. Looking ahead to the rest of 2025, the expectation is for continued growth in alternative hybrid powertrains, with a view to lift vehicle sales from 10% to 25%.

Currently there are hybrid models that are already popular with consumers. The three best selling hybrid vehicles in the U.S. last year were hybrid versions of the Ford F-150, Toyota RAV4 and Honda CRV. That’s the U.S. so be sure we will see more Hybrid options offered in New Zealand and globally.

2. Working to lower the cost of batteries to assist profits or increase EV adoption?

Lithium-ion BatteryDecreasing battery costs combined with new battery chemistries is hoped to lead to lower cost EVs. Lithium-ion battery pack prices reached a record low of $139/kWh in late 2023, and by the end of 2024 the cost dropped to $115/kWh and according to predictions, the price may drop to as low as $80/kWh by 2026.

Some reports estimate that EVs would achieve ownership cost parity with ICE (Internal Combustion Engine) vehicles without the need for any subsidies. For 2025, American new EV sales will continue to rise with sales expected to peak at around 10% of the total market.

This is all dependant on the introduction of new models, improved charging infrastructure and improvements in battery technology. Hybrids continue to account for a growing percentage of total vehicle sales, and automakers are responding with new models.

Although falling battery costs have made some EVs more affordable, actual purchases remained largely unchanged in 2024 and predict similar for 2025. The reality shown in the data reveals that EVs have pretty much flatlined from where it was in 2023. See more strategy rethink in Part 2.

February 2025

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