Honda Projects First Loss Since 1957 - $15.7 Billion - Thanks To EV Strategy Fail

Authored by Rob Sabo via The Epoch Times (emphasis ours),

A reassessment of Honda Motor Co., Ltd., corporate electric vehicle (EV) strategy and planned cancellation of three EV models for the North American market could lead to losses totaling approximately $15.7 billion for its fiscal year ending March 31, the company said in a news release on March 12.

It would be the first time Honda has posted an annual loss since its shares were first listed on the Tokyo Stock Exchange in 1957.

Honda said it initiated a strategic shift in its manufacturing plans towards electrification due to major policy changes in the United States that pushed for widespread adoption of EVs—especially in smaller passenger vehicles—as a long-term solution for reaching carbon neutrality.

“Honda had been making steady progress in pursuit of EV adoption by leveraging its stable earnings base provided by existing gasoline and hybrid vehicle business based on technologies and know-how amassed through the development of hybrid models over many years,” the Tokyo-based automobile manufacturer said.

However, Honda said it was forced to reexamine its automobile electrification strategy due to recent changes in the EV business environment that led to declining profitability. Honda reported a near 50-percent year-over-year decline in operating profit for the quarter ended Dec. 31, 2025, due to heavy losses in its EV business segment and the impacts of President Donald Trump’s tariff policies.

Honda also cited economic pressure in Chinese and other Asian markets from new EV manufacturers making software-laden vehicles that are more in line with shifting consumer demand. The expiration of a $7,500 federal tax credit on the purchase of new electric vehicles on Sept. 30, 2025, also led to a significant reduction in consumer demand for EVs in the United States, Honda noted.

“Honda pursued EV adoption with strong determination that striving for carbon neutrality is a responsibility Honda, as a [manufacturer] of mobility products, must fulfill for the future. However, in the U.S., the expansion of the EV market has slowed down due to several factors including the easing of fossil fuel regulations and revisions to EV incentives,” the Japanese automaker said.

Honda said it now will cancel the planned development and market launch of the Honda 0 sport utility vehicle and 0 Saloon, as well as the Acura RSX. Honda unveiled two prototype models of its 0 series lineup at the Consumer Electronics Show in Las Vegas in January 2025.

“Honda automobile business has fallen into an extremely challenging earnings situation due to various factors, including its inability to respond flexibly to these changes in the business environment, compounded by a decline in the profitability of gasoline and hybrid models due to the impact of newly imposed tariffs,” Honda said.

Shares of Honda Motor Co., Ltd. were down nearly 6 percent in intraday trading. Honda’s stock has fallen more than 22 percent over the past six months.

Honda’s EV woes are shared by other automobile manufacturers. In December, Ford Motor Company said it would take a $19.5 billion writedown after discontinuing several EV models due to waning demand.