Subaru’s Electrification Plan Undergoes Adjustments
Subaru has joined a number of automakers reducing investments in fully electric models due to changing consumer preferences and growing demand for hybrid vehicles. This may lead to the postponement of several planned Subaru electric models.
Key Strategy Points
Company President’s Words
During a recent briefing, President Atsushi Osaki explained that “growing demand for hybrids and the reassessment of internal combustion engines” were the reasons for postponing “investments in mass EV production”.
Electric Strategy Update
Subaru allocated 1.5 trillion yen (approximately $9.74 billion) for electrification until 2030. Of this amount, 300 billion yen ($1.94 billion) has already been spent, and the remaining 1.2 trillion yen will be reviewed according to new market conditions.
In the near term, the changes will not affect the launch of four electric off-road vehicles, developed jointly with Toyota, which are set to appear by the end of 2026. However, the release of four other electric models, which were planned to be developed independently by 2028, may be delayed.
Hybridization Trend
Over the past 18 months, a clear trend towards hybridization has been observed, prompting other manufacturers, such as Hyundai, to increase investments in this direction.
Additional factors include economic challenges: the loss of federal tax incentives for electric vehicles in the US and high automotive tariffs. Manufacturers are forced to cut budgets and spend funds more strategically.
Financial Consequences and Plans
Subaru expects tariffs to impact its finances by 210 billion yen ($1.36 billion) this year. In the fiscal year ending March 2026, the company forecasts a net profit of 160 billion yen, which is 53% less than last year.
To mitigate the consequences, Subaru plans to reduce costs by 200 billion yen ($1.29 billion) by 2030, which will help stabilize the balance in a changing market environment.
Latest Electric Model
The newest electric vehicle in Subaru’s portfolio is the Uncharted — a redesigned and renamed version of the electric Toyota C-HR. Subaru gave it a more robust and adventurous character, preserving its brand image for outdoor enthusiasts, even while rethinking the pace of transition to battery technologies.
These changes in Subaru’s strategy reflect broader trends in the automotive industry, where manufacturers are balancing long-term electrification goals with short-term market realities. The growing popularity of hybrids, especially in North America, could be a temporary stage on the path to full electrification, but it could also delay this transition if consumers prefer familiar technologies. Financial pressure from tariffs further emphasizes the need for flexibility in planning, which could lead to further adjustments in the global strategies of not only Subaru but also other automakers.