Honda Reports First Loss in Decades as It Slows EV Strategy

Honda, Japan’s second-largest carmaker, announced its first operating loss in over six decades, reporting a 413.4 billion yen shortfall for the fiscal year ending March 2026. The loss stems from a major restructuring of its electric vehicle (EV) strategy, including the cancellation of two EV projects with Sony in April. Despite the financial hit, Honda’s stock rose as much as 8% after the company projected a return to profitability by March 2027. The company attributed its losses partly to U.S. policy changes, including the scrapping of EV tax incentives under President Donald Trump’s administration and reduced tariffs on imported vehicles. Honda also cited declining competitiveness in China and broader economic strains from the Middle East conflict, which affected oil and energy markets. Global vehicle sales dropped to 3.4 million units, down from 3.7 million the prior year, though motorcycle sales—led by its iconic Super Cub models—rose to 22.1 million, helping offset losses. Honda emphasized a shift toward hybrids and internal combustion engines, acknowledging that EV demand had fallen due to relaxed U.S. environmental regulations. The company’s CEO, Toshihiro Mibe, confirmed the new strategy still targets carbon neutrality but prioritizes hybrids and traditional vehicles. Meanwhile, rivals like Toyota and Nissan have also faced financial struggles, with Toyota forecasting a 22% net income decline and Nissan reporting $3.4 billion in losses, though Suzuki bucked the trend with an 8% revenue increase.