• Honda’s developing and refining its hybrids despite working on EVs
• A next-gen hybrid system is in the works
• Honda’s targeting 100% battery electric and fuel-cell sales by 2040

Honda will continue to refine and development its two-motor hybrid system, currently used in popular models like the Accord, CR-V, and most recently the 2025 Honda Civic Hybrid, as it works to expand production of battery-electric vehicles and hydrogen fuel-cell vehicles.

The automaker on Wednesday provided an update on its next-generation hybrid system, which will continue to be paired with 1.5-liter and 2.0-liter inline-4 engines running on the Atkinson cycle. Operation of the system also won’t change dramatically, with the engine primarily used as a generator, but still able to drive the wheels directly via a clutch.

However, Honda claims efficiency improvements when the engine is being used to drive the wheels, plus an improvement in standalone fuel economy for the 1.5-liter engine. The updated hybrid system also introduces a new front drive unit that’s more compact than before, includes an integrated cooling system, and features more commonality across the larger and smaller engine applications to lower costs, Honda claims.

The 2.0-liter version of the hybrid system will be used in concert with a new mid-size vehicle platform currently under development. Hybrids using this platform will see a 10% improvement in fuel economy over the first two-motor hybrid models, Honda claims. That will likely come in part from a claimed 10% weight reduction compared to current hybrids.

On the cost front, Honda is aiming for 60% parts commonality across all models using the new mid-size platform. The goal is to, by 2027, reduce the cost of all hybrid models by 50% from the 2018 cost. Honda claims to have already gotten halfway there with the North American-market Accord Hybrid, having achieved a 25% cost reduction compared to the 2018 model.

As confirmed earlier this year, Honda will also add all-wheel drive to its hybrids in the near future, using a dedicated motor to power the rear wheels in a manner similar to what rival Toyota already does with most of its all-wheel drive hybrids.

Honda Prelude concept

The automaker will also debut a new feature called S+ Shift in the Prelude coupe that arrives in the U.S. next year. S+ Shift is meant to replicate the feel of gear shifts as a substitute for the manual transmission the new Prelude won’t have. Despite its sporty nature, the Prelude is expected to use the same transmission-less system as other Honda hybrids.

Hybrids will remain important in the near term, but Honda is targeting 100% battery-electric and fuel-cell vehicle sales by 2040. In a separate announcement, the automaker said it was building a new factory in Japan to manufacture a next-generation fuel-cell system, targeting an annual production capacity of 30,000 units. Like many other automakers that previously committed to fuel cells, Honda appears to be pivoting from passenger cars to commercial vehicles. The automaker said it aims to capture 5% of the fuel-cell truck market by 2030, and 30% by 2040.

For passenger cars, the main focus is the 0 Series EVs, announced at CES 2024 and scheduled to make their production debut in 2026. At least some of these EVs will be manufactured in the U.S., and the same basic platform will be used for the joint Sony-Honda Afeela brand, as well as future EVs from Honda’s premium Acura brand.