Honda reassesses EV strategy, warns of up to $15.7B in losses

On the Dash:

• Honda is shifting focus toward hybrid EV models as demand for full EVs slows in the North American market.
• Large EV-related write-downs across the industry signal a broader recalibration of electrification timelines.
• Profit stability may increasingly depend on diversified business units such as motorcycles and financial services.

Honda said Thursday it expects to record up to $15.7 billion in expenses and losses tied to a reassessment of its electric vehicle strategy, a move that is expected to push the company to an annual net loss for the fiscal year ending March 31.

The Japanese automaker said costs related to the strategic review could total as much as 2.500 trillion yen during the current fiscal year and in the coming years. As a result, Honda now forecasts a net loss of between ¥420 billion and ¥690 billion, reversing its previous projection of a ¥300 billion net profit.

Despite the expected losses, the company maintained its annual revenue forecast at 21.100 trillion yen.

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Honda said it decided to cancel the launches and development of certain models due to a slowdown in the North American EV market. The automaker also expects to record impairment losses on its investments in China as market competition intensifies.

The shift reflects a broader recalibration across the global auto industry as manufacturers adjust electrification strategies amid slower consumer adoption. Several major automakers have recently reported significant EV-related charges.

Jeep maker Stellantis said in February it would record about $26 billion in charges. Ford reported a $19.5 billion hit in December, while General Motors announced a $6 billion charge in January.

Honda said it plans to strengthen its hybrid EV lineup to improve profitability in its automotive business. The company also intends to rely on earnings from its motorcycle and financial services divisions to support stable returns for shareholders.

In response to the financial impact, some executives will take temporary pay reductions. Chief Executive Toshihiro Mibe will forgo 30% of his monthly pay for three months.

Last month, Honda reported a loss in its car business for the quarter ended December, citing U.S. tariffs and EV-related impairments, although its motorcycle division posted profit growth during the same period.