Honda Motor Co. faces up to ¥2.5 trillion ($15.7 billion) in charges and an historic annual loss as it joins a growing list of global brands battered by the rapid unraveling of the electric vehicle transition.
The carmaker’s strategy rethink will see it cancel the development and launch of three EV models that had been planned for North America, it said Thursday. Honda also forecast between ¥270 billion and ¥570 billion in operating losses for the fiscal year ending March.
Meanwhile, its net loss could be as much as ¥690 billion — the first since Honda began disclosing consolidated results in 1977. It previously predicted a profit.
“The situation changed far more rapidly than we expected,” Chief Executive Officer Toshihiro Mibe told reporters. “The suspension of EV subsidies in North America undercut growth, and competition in China meant we couldn’t provide attractive models or maintain our competitive edge.”
Just last month Honda warned of surging expenses related to its EV business, but the shock announcement lays bare how fast electric ambitions are crumbling. After piling into the sector as clean-energy initiatives fueled a bullish outlook, carmakers are now scaling back their big EV bets as they struggle with volatile demand and intense competition from Chinese manufacturers.
Honda’s charges would put it alongside Stellantis NV, which is taking more than €22 billion ($25 billion) in charges mainly linked to reversing course in its EV strategy, and Ford Motor Co.’s $19.5 billion hit from its overhaul. Honda’s ¥2.5 trillion hit will be split almost evenly across this fiscal year and the next, it said.
The financial fallout is relatively large because Honda had been particularly aggressive on EVs, according to Bloomberg Intelligence senior auto analyst Tatsuo Yoshida.
“The scale of the charges exceeded expectations and are likely to be viewed negatively in the near term,” he said. “Uncertainty and risks remain, so it is too early to say that all negative factors have been cleared. Nevertheless, the disclosure clarifies a substantial portion of the downside related to BEVs, offering at least some visibility where there had previously been little.”
Auto Troubles
Honda said its auto business has struggled in light of US tariffs and a loss of its competitive edge in Asia, particularly in China where Honda expects to incur an impairment loss on investments.
Foreign automakers have rapidly lost ground in China as consumers flock to domestic brands they view as better able to meet their needs. BYD Co. has led the charge there and last year became the world’s biggest EV maker.
Honda said it will strive to return its auto business to profitability. The unit had a ¥166.4 billion operating loss in the first nine months of the fiscal year. Its motorcycles unit continues to boom.
The carmaker said that it’s looking to strengthen its hybrid vehicle lineup by reallocating resources and streamlining models in light of the slowdown in North America. It’s also aiming to enhance its business in India, which is a growth market both for cars and motorcycles.
Mibe said the company will announce a revised business strategy in May.
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Published on March 12, 2026
