Amid an industry-wide shift that could make a great automotive drinking game, Subaru has become the latest automaker to rethink its all-electric ambitions. Originally, the company planned to invest nearly $10 billion by 2030 to develop a range of new EVs. Now, however, Subaru is redirecting part of that effort toward hybrids — a segment seeing impressive growth as global demand for full electrification begins to slow. This shift means that models like the Solterra, Trailseeker, and Uncharted — all of which share significant Toyota DNA — may remain Subaru’s primary EV offerings as it scales back its plans for fully in-house electric vehicles.
Putting The Brakes On Full Electrification
Echoing one of our reports from May 2025, Subaru CEO Atsushi Osaki confirmed during a recent earnings call that the automaker will be rethinking the pace and timing of its “full-scale EV mass production investment.” That specifically refers to the $9.8 billion Subaru had originally allocated toward EV development by 2030 — of which about $1.9 billion has already been spent on its EV-sharing partnership with Toyota. Toyota’s bZ, bZ Woodland, and C-HR crossovers share their platforms with Subaru’s Solterra, Trailseeker, and Uncharted, respectively. Those vehicles, along with a fourth co-developed EV that will wear both Subaru and Toyota badging, are reportedly unaffected by Osaki’s announcement.
However, a quartet of in-house Subaru EVs may now be on the chopping block. These independently designed models were slated to arrive in 2028, marking Subaru’s push into fully electrified kei and subcompact segments where it has traditionally been strong. But with global EV demand slowing and international tariffs complicating production costs, Subaru is taking a more cautious approach. According to Carscoops, the company expects a $1.03 billion net profit for the 2025 fiscal year — a 50 percent decline from the previous year — largely attributed to U.S. tariffs on imported goods.
Hybrids Have A Place In Subaru’s Future
But while the news may unsettle full-electric purists, Subaru isn’t abandoning efficiency. On the contrary, strong demand for the newly hybridized Forester and Crosstrek has encouraged the automaker to consider expanding its gas-electric lineup. The Outback, Subaru’s perennial bestseller, seems the most likely candidate to receive the torquey and efficient “Strong Hybrid” powertrain next.
There’s also a chance Subaru could move beyond conventional hybrids, venturing into extended-range plug-in hybrids (E-REVs) — possibly utilizing the futuristic turbine generator technology revealed in a patent filing earlier this year. Vehicles equipped with such a setup could travel 100 miles or more on pure electric power before a small internal combustion engine kicks in to recharge the battery on the go.
More traditional PHEVs are also a strong possibility. Subaru’s last plug-in hybrid, the previous-generation Crosstrek Hybrid, offered 17 miles of electric-only range but sacrificed a bit of cargo space due to its large battery pack. With modern battery advancements improving both energy density and packaging efficiency, Subaru’s return to the plug-in hybrid market could be far more seamless — and far more competitive — this time around.
FAQ’s
1. Which automaker recently decided to abandon its EV plans?
The specific automaker in question has announced that it will pause or scale back its fully electric vehicle projects to concentrate on hybrid and plug-in hybrid models instead. The company hasn’t dropped EVs entirely — it’s just refocusing where the market demand currently is.
2. Why is this automaker shifting its focus from EVs to hybrids?
Slower-than-expected EV sales, high production costs, and consumer hesitation over charging infrastructure are the main reasons. Hybrids give the company a more practical bridge between gasoline and full electric power.
3. Does this mean the brand is giving up on electric vehicles completely?
Not quite. Most automakers still plan to build EVs in the future, but for now, they’re prioritizing hybrids until the EV market becomes more stable and profitable.
4. What factors led to this decision — sales, cost, or technology limits?
All three. EV demand has cooled in some regions, batteries remain expensive, and charging networks haven’t grown fast enough. These issues make hybrids a safer short-term investment.
5. How are hybrid vehicles different from fully electric cars?
A hybrid uses both a gasoline engine and an electric motor, while a fully electric vehicle (EV) runs only on battery power. That means hybrids don’t rely on charging stations.
6. What advantages do hybrids currently offer over EVs?
Hybrids are easier to refuel, cost less upfront, and eliminate range anxiety. They also deliver excellent fuel economy — without requiring a charger at home.
7. Are other automakers also rethinking their electric-only strategies?
Yes. Several big names — including Ford, GM, Mercedes-Benz, and even VW — have recently slowed their EV timelines or added more hybrid options.
8. What are the biggest challenges EV makers face right now?
Battery cost, limited raw materials, charging infrastructure, and cooling demand growth are the main hurdles. Consumers also worry about long-term battery life and replacement costs.
9. How does customer demand influence these decisions?
Automakers follow where customers spend. Since hybrid sales remain strong and EVs have slowed, it makes sense for brands to meet current buyer preferences.
10. Is the global slowdown in EV sales real?
Yes, growth is still happening, but it’s not as rapid as forecasted. Early adopters have already bought EVs, and mainstream buyers remain cautious.
11. Are battery prices or supply chain issues part of the reason?
Absolutely. Battery materials like lithium and nickel have fluctuated in price, and global supply chain challenges have made it harder to scale production efficiently.
12. What’s the difference between a hybrid and a plug-in hybrid?
A regular hybrid recharges itself through braking and the engine, while a plug-in hybrid (PHEV) can be charged from an outlet and drive longer distances on electric power alone.
13. Will hybrids still qualify for government incentives or tax credits?
In some regions, yes — especially plug-in hybrids. However, most government programs now favor fully electric vehicles for the biggest tax breaks.
14. How much more efficient are hybrids compared to gas-only cars?
A hybrid can typically deliver 30–50% better fuel economy than a traditional gasoline vehicle, depending on the model and driving conditions.
15. Are hybrids considered environmentally friendly?
They’re more eco-friendly than gas cars, but not as clean as EVs. Still, hybrids produce fewer emissions overall and help reduce fuel use on a large scale.
16. What does this move mean for the automaker’s long-term electrification plan?
It’s more of a pause than a reversal — a strategic slowdown that allows the brand to keep investing in EV research while maintaining profitability with hybrids.
17. Does this signal a larger industry trend away from EVs?
It signals a recalibration, not abandonment. The EV shift is still happening, but the timeline is stretching as the industry adapts to real-world challenges.
18. How might this affect the used EV market?
Used EV prices may soften a bit as demand cools, but good models with strong range and battery health should still hold decent value.
19. Will EV owners face lower resale values as demand cools?
Possibly, yes — especially for first-generation EVs with limited range or outdated charging tech. Newer long-range models should remain more stable.
20. Are consumers losing confidence in electric vehicles?
Not entirely. Many still believe EVs are the future, but current concerns about cost, range, and infrastructure are slowing adoption.
21. How do charging infrastructure limitations factor into this shift?
They play a huge role. In many regions, there simply aren’t enough fast chargers, making EV ownership less convenient than owning a hybrid.
22. Are EV charging times and range anxiety still major concerns?
Yes, particularly for buyers who can’t charge at home or drive long distances often. Range anxiety remains one of the biggest EV adoption barriers.
23. What role do power grid issues play in automakers’ EV hesitation?
In some countries, power grids are already strained. Adding millions of EVs could increase the load, so hybrids act as a safer transition step.
24. Are hybrid vehicles easier or cheaper to maintain than EVs?
In general, hybrids are still easier for most repair shops to service and require less specialized equipment than EVs, though they have more complex drivetrains.
25. Which markets are still seeing strong EV growth despite setbacks?
China, parts of Europe, and some U.S. states like California continue to see strong EV adoption due to better incentives and infrastructure.
26. How does this automaker’s strategy compare with Toyota’s hybrid-focused approach?
Very similar. Toyota has long emphasized hybrids as a practical bridge to full electrification — and now other automakers seem to agree.
27. Could this decision delay the transition to zero-emission vehicles?
Potentially, yes. It could slow progress in the short term but may make the long-term shift more sustainable by keeping companies financially stable.
28. How are investors reacting to automakers changing EV plans?
Investors are mixed. Some appreciate the cost control, while others worry it signals a lack of long-term EV commitment.
29. What does this mean for the future of electric truck or SUV programs?
Some electric truck projects may be delayed or re-evaluated. Expect more hybrid and plug-in hybrid SUVs to fill the gap in the meantime.
30. Are governments still pushing for all-electric goals by 2035 or beyond?
Yes, most governments haven’t changed their long-term zero-emission targets, even if automakers adjust their pace.
31. Will hybrids dominate the market again before EV tech catches up?
For the next few years, yes — hybrids may become the go-to option for buyers seeking better fuel economy without charging hassle.
32. What technologies are being improved in next-generation hybrids?
New hybrids will feature more powerful electric motors, better batteries, and smoother energy management systems, closing the gap with EVs.
33. Can hybrids truly meet stricter global emission standards?
They help, but may not fully meet future zero-emission mandates. Still, they play a big role in reducing emissions right now.
34. How might consumers benefit from this shift toward hybrids?
Buyers get more affordable, efficient vehicles without worrying about charging access — ideal for people not ready for full EVs yet.
35. Is this a short-term adjustment or a long-term business strategy?
It’s mostly a short-to-medium-term strategy, giving automakers breathing room while EV tech, demand, and infrastructure mature.
36. Could solid-state batteries eventually bring automakers back to full EV production?
Definitely. Once solid-state batteries become viable, they’ll offer faster charging, longer range, and lower cost — likely reigniting EV momentum.
37. How should buyers choose between a hybrid, plug-in hybrid, and EV in 2025?
If you drive short daily distances and can charge easily, go for an EV. If not, a hybrid or PHEV is a great middle ground for now.
38. What does this change mean for the brand’s current EV owners?
Existing EV owners won’t be affected immediately. The automaker will continue supporting service, warranties, and software updates.
39. Are hybrid resale values expected to improve as demand increases?
Yes, strong hybrid demand and rising fuel prices could help hybrids retain value better than before.
40. What’s the overall takeaway from this automaker’s decision?
It’s a realistic move. Hybrids are the smart middle step for today’s market — practical, proven, and profitable — while the EV industry regroups for its next leap forward.
Read more: Toyota Invests Billions in U.S. Manufacturing – What It Means