Electric motors and batteries are only part of the equation when it comes to hybrid vehicles. Hybrids still need an engine and Honda is a company that has built its reputation on engines over the past half century. As Takeo Fukui prepares to retire as CEO of Honda Motor Company, he is still emphasizing the importance of engines even in hybrids. Smooth running, efficient engines with good control systems are critical to making a hybrid perform acceptably. If the engine can't restart without shuddering, customers won't like the driving experience and if noise levels change radically between engine on and off operation, that can also be seen as a negative.
Of course optimizing the engine is also insufficient and eventually Honda will have to come up with a more robust hybrid system in order to support larger vehicles. While Honda will be switching to lithium ion batteries in the next couple of years for its hybrids, the company has consistently said that it doesn't see plug-in vehicles as a robust long-term solution. Instead, it will likely focus on using the lithium batteries to reduces the cost and weight of conventional hybrids while looking to fuel cells long term.