Honda Scales Back and Delays Hydrogen Fuel Cell Plant in Japan Amidst Global Market Shifts
Key Insights
Honda has announced a significant reduction in capacity and a delay for its dedicated hydrogen fuel cell production plant in Moka City, Japan.
The planned annual production capacity has been cut from 30,000 units to just over 20,000, with no new start date provided beyond FY2028.
This delay means the project will not qualify for a crucial Japanese government subsidy aimed at supporting clean energy supply chains.
Despite the setback, Honda reiterates its commitment to hydrogen as a core business, targeting FCEVs, commercial vehicles, stationary power, and construction machinery.
Tokyo, Japan – Japanese automaker Honda Motor Co. has announced a significant scaling back and delay of its planned dedicated hydrogen fuel cell production plant in Moka City, Tochigi Prefecture, citing “recent changes in the global hydrogen market environment.” The decision marks a recalibration of Honda’s ambitious plans to bolster its in-house fuel cell system manufacturing capabilities.
Initially announced in late 2024, the facility was set to repurpose parts of a former Honda Powertrain Unit Factory, with operations slated to commence before the end of the fiscal year ending March 31, 2028 (FY2028). The original projection for annual production capacity stood at 30,000 units of next-generation hydrogen fuel cell systems, positioning Honda as a key player in the burgeoning hydrogen economy.
However, the revised plan now targets an annual production capacity of “more than 20,000 units,” a substantial reduction from the initial target. Furthermore, Honda has indicated that the start of operations will be delayed beyond FY2028, without providing a new definitive timeline. This delay carries significant financial implications, as the project will no longer qualify for a government subsidy designed to support the development of clean energy supply chains in Japan.
Despite this setback, Honda reaffirms its strategic commitment to hydrogen, considering it one of its new core businesses alongside electrification. The company has identified four primary segments for the application of its fuel cell modules: fuel cell electric vehicles (FCEVs), commercial vehicles, stationary power generators, and construction machinery. This diversified approach suggests Honda is hedging its bets across various sectors where hydrogen technology could gain traction, rather than solely relying on passenger FCEV market growth.
This facility, once operational, will represent Honda’s first dedicated plant for the production of its proprietary fuel cell system. The company remains one of the few global automakers to maintain a strong focus on hydrogen fuel cell development, even as many competitors prioritize battery electric vehicle technologies. The adjustment in production plans highlights the ongoing challenges and uncertainties within the hydrogen market, including infrastructure development, cost competitiveness, and the pace of demand growth across different applications.