Honda Motor Co. has warned it may post its first annual loss since listing on the stock exchange in 1957. The Japanese automaker announced potential restructuring costs of up to 2.5 trillion yen, or roughly $15.7 billion, linked to its electric vehicle program. Slower-than-expected demand for EVs has forced the company to reconsider its strategy. The announcement marks a major turning point for the global automotive manufacturer.
Honda confirmed it will cancel three electric vehicle models that had been planned for production in the United States. Analysts had predicted some financial impact from the company’s EV investments. However, the scale of the write-down and the decision to scrap the production program surprised many observers. Experts say it signals a significant shift in Honda’s EV expansion plan.
Chief executive Toshihiro Mibe explained that declining demand for electric vehicles has made it difficult for the company to maintain profitability in the segment. Honda is also reducing the value of its operations in China. Competition has intensified in that market, especially from domestic EV manufacturers such as BYD. Chinese brands have gained popularity for their technology-focused vehicles.
The company now expects to report a loss of up to 570 billion yen for the fiscal year ending in March. This contrasts sharply with its earlier forecast of a 550 billion yen profit. Following the announcement, Honda’s US-listed shares dropped about 8 percent in premarket trading. The shift highlights the financial risks associated with large-scale EV investments.
Across the automotive sector, companies are increasingly scaling back electric vehicle ambitions. Automakers including Ford, General Motors, and Stellantis have also reported major write-downs tied to EV strategies. Despite these setbacks, Honda plans to strengthen its product lineup in India and present a revised long-term business strategy next year.