Honda Stock (NYSE:HMC) Continues EV Pareback, Shareholders Seem Happy

The electric vehicle (EV) pareback that we have been seeing for some time with automakers all up and down the spectrum seems to be carrying on. Just last week, we heard about automaker Honda Motor Company’s (HMC) plans to pare back a plant in Canada. Now, more word about cutbacks in operations emerges, and Honda is dialing back its plans some more. But investors did not seem displeased; in fact, Honda shares were up modestly in Tuesday afternoon’s trading.

Growth for demand in electric vehicles is in open decline, and so, Honda is paring back its spending accordingly. As it turns out, the delayed Canadian plant was just for starters, as Honda noted that it would put up seven trillion yen into its electrification strategy. That sounds pretty good, until you realize that Honda had previously planned to put around half again as much with 10 billion yen.

Ideologically, Honda maintained that electric vehicles remain the best option when it comes to reaching carbon neutrality. However, Honda also realizes that people simply do not want them, at least not yet, and is thus planning to put more promotional weight and resources into hybrid vehicles instead, which serve as something of a compromise between the pure electrics of environmentalist fantasy and the gas vehicles that regular people actually, you know, want.

Remember to Watch Your GIFs

Of course, Honda’s case here makes perfect sense, but is there perhaps more to it than that? It would be unseemly to speculate, at least it was until we heard about Honda’s plans to pare back investment somewhere else. Honda is dropping its sponsorship of Team Liquid, an esports team.

However, it might not have been so much a matter of saving money as saving face. One of the members of Team Liquid, Lucas Dias, put up a message targeting CAG Osaka, another team that recently took Team Liquid out of the running in the R6 RE:LO:AD tournament. The message was simple enough: “We won against Faze and lost against the powerful CAG, but let’s move forward and see you at the next camp.” But Dias then made the mistake of adding a GIF of a mushroom cloud, the common consequence of a nuclear detonation. Dias subsequently apologized, but this cut little ice with Honda, who pulled its sponsorship dollars soon after.

Is Honda Stock a Good Buy?

Turning to Wall Street, analysts have a Hold consensus rating on HMC stock based on one Hold from Bernstein analyst Masahiro Akita assigned in the past three months, as indicated by the graphic below. After a 12.31% loss in its share price over the past year, HMC has no average price target to convey.

See more HMC analyst ratings

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