Honda Motor became the first Japanese automaker to announce plans to phase out sales of gasoline-powered cars. 

The company set 2040 as the date to phase out gasoline-powered cars, giving its new CEO Toshihiro Mibe an opportunity to put his stamp on the 84-year-old firm. 

“It’s a very bold target,” admitted Yachiyo Tanaka, an analyst at automotive research company Fourin. “Honda has pledged to pull ahead of other automakers by introducing the latest technologies.” 

The move aligns with Prime Minister Yoshihide Suga’s goal of achieving carbon neutrality by 2050. With electric vehicle (EV) penetration at just 1% in Japan, the country has some distance to go before meeting that target. 

The company’s pledge stretches beyond Japan’s borders. BloombergNEF predicts global sales of EVs will soar to 14 million by 2025, up from 3.1 million in 2020. Honda receives around 56% of its revenue from North American sales. 

Honda also announces plans to unveil two new electric motorcycles by 2024 as well as 10 new EV cars in China within five years. Motorcycles represent just 14% of Honda’s total revenue but their sales volumes are far greater. The automaker sells around 15 million motorcycles a year versus 4.5 million cars. BloombergNEF forecasts that number will grow to 78 million by 2040. 

Honda formed a consortium in March with Yamaha Motor Co., KTM AG and Piaggio &C SpA to develop swappable battery standards for electric two-wheelers, tricycles and quadricycles.

Mibe called Japan’s target for carbon neutrality “reasonable” and reported Honda will form alliances if needed to meet its goals.

“We can’t postpone making an effort then expect to reach the target at the last minute,” Mibe said. He also admitted selling only zero-emission vehicles by 2040 would be an “uphill struggle.” 

Critics report Honda’s goal is unrealistic. Ford Motor Co. doesn’t expect to be carbon neutral until 2050. And Toyota has put is emphasis on hybrids. 

Takeshi Miyao, an analyst at Carnorama, suggested the move was a short-term tactic to grab stakeholder attention and shift it from Toyota. “Honda has no choice but to unveil a plan that’s almost opposite to appeal to investors,” he said.