Subaru cuts EV investment in favor of next-gen ICE, hybrid development

Subaru to focus more on next-gen ICEs and HEVs in short term

Subaru is one of the manufacturers that were slow out of the gate when it comes to electric vehicles. And given that EV demand is slowing down in favor of hybrids, the brand has decided not to play catch-up anymore and shift its resources, revising its electrification plans.

The manufacturer will reallocate its JPY 1.5 trillion investment to strengthen the development and production of hybrid and internal combustion engine models. Currently, Subaru only offers the Solterra and Trailseeker EVs, which means new models could be delayed or heavily revised.

It is worth noting that, based on Subaru’s latest management policy report, the brand still believes BEVs will play a central role in its medium to long-term electrification plans. But for the short term, the company revised its investment plan to include the development of next-generation ICE vehicles.

Subaru will likewise pursue a flexible and efficient production system – one that can respond to market changes regardless of whether consumer preferences shift from battery EVs to hybrids or ICEs, and also to counteract tariff impacts. The brand is aiming for an annual cost reduction of around JPY 200 billion by 2030 while expanding its profitability.

Speaking of which, the brand wants to increase its global sales through a significant expansion of its product lineup. If the presentation slides are to be believed, we could see up to 10 new Subaru models at least in the next five years, which the brand hopes will let it achieve global sales of over 1.2 million units by the first half of the 2030s.

As shown during the 2025 Japan Mobility Show, Subaru is banking on its performance and adventure “scenes” to create attractive products – the performance being the STi, and the Subaru Wilderness for its adventure side.

Here’s to hoping there’s an STI with turbo boxer hybrid in that pipeline – one that isn’t too different from the performance-B STI concept shown at JMS.