In a strategic move to bolster its U.S. hybrid offerings amid ongoing uncertainties surrounding import tariffs, Honda is looking to source batteries from Toyota for its hybrid models.
According to a report from Nikkei Asia, Honda plans to purchase enough batteries to support approximately 400,000 vehicles in the upcoming fiscal year.
This decision comes as Honda sold around 308,000 hybrids in the U.S. last year, representing 22% of its total sales, indicating a growing reliance on hybrid technology in the face of fluctuating market conditions.
Honda is reportedly aiming to shift more production to the U.S
Traditionally sourcing batteries from Japan and China, Honda is now exploring alternatives to mitigate the impacts of tariffs imposed by the Trump Administration.
Recently, Trump announced an additional 10% tariff on all Chinese imports and hinted at increasing tariffs on Japanese auto imports from 2.5% to a staggering 25%.
This has prompted Honda to look for domestic solutions, with the potential for batteries to be produced at Toyota’s new plant in North Carolina, set to commence operations later this year.
This transition is significant as hybrids play a crucial role in both Honda’s strategy and Toyota’s goal of having electrified vehicles—encompassing EVs, hybrids, plug-in hybrids, and hydrogen fuel-cell vehicles—make up over 50% of its U.S. sales this year.
Notably, Honda’s hybrids, such as the Accord sedan, have become increasingly integral to its product lineup, contributing to half of the sales mix for certain models.
In addition to these developments, Honda is reportedly aiming to shift more production to the U.S. and revamp its supply chains to sidestep hefty tariffs on Mexican and Canadian goods, which could amount to an estimated $4.7 billion annually.
While the company is also focused on enhancing its hybrid technology, the urgency for advancements may lessen in the short term if regulations on emissions are relaxed as expected under the current administration.
