Honda car business posts loss amid EV impairments and US tariffs

Honda car business posts loss amid EV impairments and U.S. tariffs

• Honda’s car business posted a quarterly loss of $602 million, largely from U.S. tariffs and EV impairments.
• EV-related write-downs totaled $1.7 billion over nine months, prompting a strategic review of electrification plans in major markets.
• Motorcycle sales and financial services helped offset some losses, but global competition and supply risks continue to pressure results.

Honda Motor reported a loss in its car business in the latest quarter, driven by U.S. tariffs and one-time electric vehicle (EV) impairments, prompting the automaker to rethink its electrification strategy in key markets, including the U.S.

The automaker recorded 43.4 billion yen, or nearly $280 million, in EV-related provisioning and impairments for the three months ended December. That brought the nine-month total to roughly $1.7 billion, reflecting provisions for losses on U.S.-sold EVs and write-downs of EV development assets due to lineup changes.

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Overall, Honda’s third-quarter operating profit fell 153.3 billion yen ($980 million), a 61 percent drop, with a 125.5 billion yen ($802 million) tariff hit weighing heavily on results. Its car division alone suffered an operating loss of 93.4 billion yen ($602 million), compared with a profit of 144.5 billion yen ($931 million) in the same quarter a year earlier. North American vehicle sales were a significant setback.

Honda’s financial-services business, which provides lending and leasing to support car sales, also saw a decline, with operating profit falling 74.7 billion yen ($479 million), down 9.1 percent. Its motorcycle division remained a bright spot, with operating profit rising 178.2 billion yen ($1.14 billion), led by growth across Asia outside Japan.

For the fiscal year ending March, Honda expects revenue to fall 21.1 trillion yen ($127 billion), down 2.7 percent from its prior forecast of 20.7 trillion yen ($124 billion). The company projects net profit to drop 300 billion yen ($1.8 billion), citing a weaker yen and lower-than-expected tariff burdens as partial offsets, but maintaining cautious guidance due to rising competition in Asian car markets. The automaker confirmed its full-year sales targets of 3.34 million cars and 21.3 million motorcycles remain unchanged.