Honda faces first annual loss

Honda Motor Co has announced it expects to suffer its first annual loss in nearly 70 years as a listed ‌company and is cancelling the development and launch of three new EVs.

The Japanese carmaker says it anticipates losing up to ¥570 billion (about NZ$6.1b) in the year to ‌the end ⁠of March 2026, compared with a previous forecast for a ¥550b profit. 

A company spokesman says it would be Honda’s first annual loss since it listed on the stock market in 1957, reports Reuters.

Weaker-than-expected demand for EVs has led the marque to rethink its electrification strategy and three models planned for production in the ⁠US – the Honda 0 SUV, Honda 0 Saloon, pictured, and Acura RSX – have been canned.

“Honda determined that starting production and sales of these three models in the current business environment, where the demand for EVs is declining significantly, would likely result in further losses over the long term,” it says.

The firm notes additional expenses or losses may be incurred in the next fiscal year or later because of restructuring its EV business.

“Combined with the losses to be recorded in the current fiscal year, the total amount of losses is expected to be a maximum of ¥2.5 trillion,” the company says. 

“This amount is estimated based on information currently available to Honda, and as this estimate includes risks and uncertainties, the actual amount to be recorded may differ from this estimate.”

Looking ahead, Honda plans to reassess its resource allocations and further strengthen its hybrid models. 

“In addition to its main markets, namely Japan and the US, Honda will enhance the model line-up and cost competitiveness in India, where market expansion is expected,” it adds. 

“In other countries in Asia as well, Honda will strive to enhance its competitiveness by introducing next-generation hybrid models and reassessing the allocation of its resources.

“Initiatives toward the future introduction of EV models will be implemented flexibly from a long-term perspective, while monitoring the balance between profitability and market trends.”