Subaru shifts to ‘ultra-efficient production’ as the automaker restructures its manufacturing strategy following a ¥57.8 billion ($362 million) impairment charge and the delay of its independently developed electric vehicles. The move comes after operating profits dropped nearly 90%, reflecting pressure from U.S. tariffs, weaker global EV demand, and the end of the U.S. federal EV tax credit, which slowed electric vehicle adoption.
Flexible Manufacturing Takes Center Stage
Under the new strategy, Subaru shifts to ‘ultra-efficient production’ by allowing internal combustion engine (ICE) vehicles, hybrids, and battery electric vehicles (BEVs) to be built on the same assembly line. Beginning in August, the Yajima Assembly Plant in Japan will produce the gasoline Forester, Forester Hybrid, Subaru Trailseeker EV, and Toyota bZ4X Touring EV on a single mixed-production line.
Meanwhile, the Oizumi Plant, initially planned as an EV-only facility, will first manufacture ICE and hybrid models before increasing EV production as market demand grows.
Toyota Partnership and Smart Factories
Subaru has also postponed its in-house EV program that was originally targeted for 2028. Instead, the company will rely on jointly developed EVs with Toyota, including the Trailseeker and bZ4X Touring, to reduce investment risks.
As Subaru shifts to ‘ultra-efficient production,’ it is introducing software-defined factories that use automation, physical AI, and modular manufacturing. Assembly lines will be reconfigured through software updates instead of costly physical changes, to cut production processes by 50% and reduce costs by 200 billion yen ($1.2 billion) by 2030.
Global Production Strategy
The company also plans to introduce the same mixed-production system at its Indiana manufacturing facility in the United States. Subaru shifts to ‘ultraefficient production’ as part of a broader industry trend, joining several major automakers that are slowing EV expansion while increasing hybrid production to better match changing consumer demand.
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