Honda said despite the shift in strategy, it still aims for all of its global new-vehicle sales to come from battery-electric of hydrogen fuel-cell models by 2040.

Honda Motor (NYSE:HMC) is scaling back its electric vehicle (EV) ambitions, cutting planned investment by 30% to 7 trillion yen ($48.4 billion) through fiscal 2030, citing weaker-than-expected demand.

The Japanese carmaker plans to reduce its investment in electric vehicles by more than $20 billion in the coming years as EV demand growth slows.