Subaru has effectively postponed plans to launch an internally developed electric vehicle (EV) indefinitely. With worsening results compounded by uncertainty in the U.S. market, it appears to be shifting away from expanding its own EVs toward a strategy centered on hybrids and existing internal combustion models.

On May 19 (local time), EV-focused outlet Electrek reported that Subaru has withdrawn its plan to launch up to 4 internally developed EV models by 2028. As a result, its plan to produce EVs at a new plant within the Oizumi factory in Japan's Gunma prefecture has also been delayed, and the facility is expected to be used first for gasoline and hybrid vehicle production.

Under its previous plan, Subaru had set a target to start mass-producing its own EVs at the new plant from 2027. Following this decision, assessments say its in-house EV programme has effectively entered a path toward suspension. The company did not present a new EV launch schedule.

The strategy revision comes alongside a sharp deterioration in results. Subaru's annual operating profit for the fiscal year fell about 90 percent from a year earlier to 40.1 billion yen. Net profit and loss also swung to a loss of 51.36 billion yen. That marks a sharp decline in profitability compared with a 325.0 billion yen profit a year earlier.

The company said cost burdens originating in the United States were the key reason for the worsening results. It incurred about 229.0 billion yen in costs from tariff burdens alone, and an additional cost of about $385.0 million from reflecting EV-related losses. It also reflected an impairment loss of 28.0 billion yen as the value of environmental regulation credits fell due to changes in U.S. government policy.

Subaru Chief Executive Atsushi Osaki (오사키 아츠시) said the company will conduct a full review of its EV strategy, citing conditions in the U.S. market. "We need to review the entire EV strategy again before setting a new launch schedule," he said.

This is not the first time Subaru has pulled back its electrification strategy. The company said in November last year it would shift part of its EV investment plan, set at about 1.5 trillion yen, to hybrid and internal combustion development. This time, it withdrew its in-house EV development schedule itself, widening the scale of the strategic revision.

A similar trend is spreading across Japan's broader automaking industry. Mazda recently said it would delay the launch of its own EV from 2027 to 2029 and cut planned EV investment to about $7.5 billion from about $12.5 billion. In recent months, Toyota, Honda, Subaru and Mazda have been moving in succession to adjust the pace of EV investment.

Subaru will, however, maintain its EV projects developed in cooperation with Toyota. The company said it plans to launch as scheduled 4 Toyota platform-based EVs: the Solterra, Uncharted, Trailseeker and the three-row SUV Gateaway.

As a result, the industry sees it as likely that Subaru will focus for the time being on defending existing profits and a strategy centered on cooperative models rather than developing its own EV platform.

Subaru had previously set a target to raise the share of EVs to about half of its global sales by 2030, but questions are being raised about the feasibility of that goal as its in-house EV launch schedule has effectively disappeared. With the new plant's operating direction shifting from EVs to a focus on hybrids and internal combustion, Subaru's electrification strategy is also expected to proceed conservatively for some time.