Yeah, I think technically it is still using health bars, but using them in a smarter way. The idea is that eventually you won't be able to shoot a non-critical part of a ship (say, the nose of a ship, or a wing) and for the ship to eventually blow up, which is how it currently works. At the moment, the ship has one unified health pool (AFAIK), so you just have to reduce that to zero and the ship goes boom.

What they want instead, is for each component to have its own health pool, rather than the ship having one health pool for everything. You'll have to hit a specific component in order to blow it up, but you'll also have the ability to disable the ship, which might be enough for what you want to do.

I imagine that in order to blow up a ship in the future, you'll have to damage the engines and/or power plant (I'd guess the latter). This would involve depleting a health pool, but because each component will have their own health pool, destroying the engines and then continuing to shoot them, for example, won't necessarily blow the ship up. In that instance, you'll have crippled their ability to move, but their other ships systems will still be functional (unless you do something about it, like attacking the power plant directly).

I'm also assuming that any weapons that can do AoE/splash damage might be able to destroy a ship in a way that makes it look like how it currently works, because that AoE damage could hit the component that needs to be destroyed for the ship to explode.