Honda just dealt a huge blow to the all-electric dream. In a stunning reversal, the Japanese auto giant has announced it is rethinking its electrification strategy, signaling that battery-electric vehicles (BEVs) are no longer the holy grail of its future.

The move is a major setback for the EV industry, which is already reeling from the September 30 expiration of federal tax credits that made electric cars competitive with their gas-powered counterparts. For years, the auto industry, mesmerized by the success of Tesla, has been in an arms race to go all-electric. Now, one of its biggest players is pumping the brakes. Hard.

“BEVs are not the goal, better electric vehicles are a pathway to achieving carbon neutral, not necessarily the only pathway,” Honda Australia president and CEO, Jay

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