Hydrogen? Honda scales back project: Honda radically slows down alternative fuel

Honda has announced that the originally planned construction of a new fuel cell production facility in Moka City, Tochigi Prefecture, Japan, will be revised. Capacity will be reduced and production start-up postponed due to the changing situation in the global hydrogen market.

Originally, a new production facility for the next generation of fuel cell modules was planned to be built on the site of a former Honda factory. Series production was scheduled to begin in the 2027/2028 fiscal year (end of March 2028) with an annual capacity of 30,000 units. Preparations for the project were already underway. Now, production will start later and initially with significantly lower volumes.

Due to this adjustment, Honda is foregoing government funding originally planned under a program of the Japanese Ministry of Economic Affairs (METI) to support supply chains in the "Green Transformation" (GX) sector. The revised plans no longer meet the eligibility criteria—in particular, the requirements regarding production start date and minimum unit volume.

The decision is part of a larger context: Honda has been a pioneer in fuel cell technology over the past decades, presenting initial concepts as early as the 1990s. In the mid-2010s, the company launched a production vehicle, the Clarity Fuel Cell. Despite years of research, however, a breakthrough in hydrogen mobility has so far eluded it.

The reasons are manifold: The filling station infrastructure is developing slowly, and in Germany, the number of hydrogen filling stations is currently declining significantly – only 79 of these stations are still in operation nationwide, and the trend is declining. Furthermore, the costs of hydrogen systems are high, and battery-electric vehicles – such as those from Tesla, BYD, and Hyundai – are increasingly dominating the market. Other manufacturers, such as Toyota, long advocates of hydrogen technology, are now also increasingly focusing on hybrid and electric drive systems. Even Hyundai's hydrogen truck projects are progressing slowly.

Nevertheless, Honda remains committed to its long-term vision: to achieve carbon neutrality across all product and corporate operations by 2050. Within this framework, the company continues to see potential for the use of its new fuel cell modules in four areas: fuel cell vehicles (FCEVs), commercial vehicles, stationary power generators, and construction equipment. The hydrogen business is to be expanded into a new mainstay of the group in the medium term.

Honda is one of the world's leading engine manufacturers. The Japanese company produces several million power units annually – including engines for cars and motorcycles, as well as power generators, garden equipment, boats, industrial equipment, and construction machinery. Honda thus covers an exceptionally broad spectrum of applications.

Honda is one of the world's leading manufacturers, particularly in the field of generators. The company's portable gasoline and diesel generators have been recognized for decades as reliable, durable, and technologically advanced. They are used by private users, tradespeople, government agencies, disaster relief organizations, construction sites, and off-grid regions.

At the same time, Honda is also developing solutions for hydrogen-based power generation. In this context, the company plans to use its next generation of fuel cell modules not only in vehicles but also in stationary generators. The goal is to be able to offer off-grid and emission-free power systems in the future – for example, for emergency power supply, remote locations, or critical infrastructure.