Subaru appears to be drastically changing its strategy around electrification , abandoning – at least temporarily – its ambitious plans to develop its own electric vehicles. The Japanese automaker confirmed that it is no longer targeting 2028 for the launch of its first fully in-house EV models , without however announcing a new timeline.
The decision comes at a particularly difficult financial time for the company, as its operating profit collapsed by almost 90% in a fiscal year. Increased tariffs, declining profitability and the large investments required for electrification appear to have pushed Subaru to a more conservative approach, now focusing on hybrid and traditional models internal combustion.
Subaru's EV factory changes direction
Until recently, Subaru planned to launch four new electric vehicles by 2028, which would be produced at a new plant in Oizumi Gunma Prefecture. This plant was designed exclusively for EV production, with operations starting in 2027.
But in the end, the plans completely change. The factory will not start with electric models, but with the production of gasoline and hybrid cars, while the transition to full EV production is postponed indefinitely.
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This development is considered particularly important, as it reflects the uncertainty that now prevails in much of the automotive industry regarding the pace of transition to electric mobility.
Economic pressures are "slowing down" electric mobility
Subaru's financial results reveal the extent of the pressure the company is under. EBIT profits fell dramatically to 40.1 billion yen, while the company went from significant profitability to a net loss of more than 51 billion yen.
According to reports, US tariffs cost Subaru about $1.4 billion, while depreciation and investments related to electric vehicles further weighed on financial results.
At the same time, the devaluation of environmental credits in the US – due to changes in regulatory policy – has taken away significant revenue from the company. The result has been to further increase doubts about whether Subaru can independently finance an aggressive EV strategy.
Subaru CEO Atsushi Osakiadmitted that conditions in the US market have forced the company to completely rethink its electrification plan.
Japan slows down transition to EVs
Subaru is not an isolated case. In recent months, there has been a clear slowdown in EV plans across almost the entire Japanese auto industry.
Mazda has already announced that it is delaying the launch of its first all - electric model until 2029, while also drastically reducing its investment in electrification. Similar moves have been made by Toyota and Honda , which are diverting much of their resources to hybrid vehicles.
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Japanese companies believe the EV market in the United States is growing at a slower pace than expected, making the huge investments required to produce electric vehicles on a large scale more risky.
However, several analysts point out that this strategy may prove safe in the short term but risky in the long term. Global EV sales continue to grow, while Chinese companies like BYD are aggressively expanding into international markets.
Subaru is increasingly dependent on Toyota
Despite the freeze on its own EV projects, Subaru continues to participate in electric models developed in partnership with Toyota. The Solterra, Trailseeker, Uncharted , and the upcoming Getaway remain in the pipeline.
But the reality is that Subaru is struggling to develop a competitive electric platform without Toyota's help. This further strengthens the strategic alliance between the two companies and reveals the enormous cost of the transition to the EV era today.
The EV market is entering a new phase of maturity
Subaru's decision reflects a broader shift in the global auto industry. After years of excitement around electric vehicles, several companies are now starting to adopt a more pragmatic stance, emphasizing profitability and a gradual transition.
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Hybrid an interim solution, while automakers try to balance environmental pressures, market demand and the high cost of developing EV technologies.
The only thing certain is that the battle for the future of motoring remains open, and the decisions of companies like Subaru show that the transition to full electric mobility may take longer than initially estimated.
