As the market shifts away from pure electric vehicles towards hybrids many automakers are switching their strategies to try and adapt to this changing reality. While some automakers are still pushing forward with EVs, others are making changes including the cancellation of development for some models.

Honda is reportedly one of them with a new report suggesting the Japanese auto giant has canceled development of an all-electric large SUV that was intended for the U.S. market.

Slower than expected EV adoption among key factors for reversal

Honda’s decision to axe this model has many layers but slower than expected adoption of EVs by consumers is a prominent factor. Consumers have not been as enthusiastic about switching to EVs as expected and the recently passed “Big Beautiful Bill” that was spearheaded by the Trump administration either eliminated or rolled back many of the federal tax incentives that budget conscious consumers were relying on for their EV purchase.

In addition to the changing marketing landscape, the cost of developing a large EV is significantly higher than other vehicles due to the size of the battery packs. According to a separate report from Nikkei Asia Honda execs concluded that the financial risk of launching a large EV in this current market was too great and thus they decided to cut their risks. This is especially apparent when you consider the SUV was scheduled to be launched in 2027 which put pressure on the company’s engineers to deliver the goods within the timeline. In the meantime, Honda will continue development of its first two “0” Series models (the sedan and a smaller mid-size SUV) with these models still expected to launch by 2026.

Report coincides with broader rollback in EVs

This report appears to follow up on other claims that Honda is rolling back its commitment to EVs. Honda originally planned to launch seven of them by 2030, but with the reported cancellation of this model among other developments, that target seems less certain. In May, Honda also announced it had reduced its investment in electrification from ¥10 trillion ($69 billion) to ¥7 trillion ($48 billion) as part o its broader product realignment.

Instead, the company is now spearheading a push to introduce 13 new-generation hybrid models around the world with the company hoping to achieve 2.2 million hybrid sales by 2030. A new large hybris SUV is slated to be among the 13 models and it would be a more profitable investment for the company in the long-term than the EV.

Honda is also far from alone in its decision and other automakers have also made revisions to their future vehicle plans. Rival automaker Nissan confirmed it’s canceling two EVs that were supposed to be produced in the U.S. while Ford canceled development of large EVs.