Honda posts first annual loss since 1950s, warns of $15.7 billion EV hit

Honda Motor Co. warned it could incur up to ¥2.5 trillion ($15.7 billion) in losses over two years as it scales back its electric vehicle (EV) strategy amid weakening demand in the United States and rising competition from Chinese manufacturers.

The company said it expects a net loss of between ¥360 billion and ¥630 billion for the financial year ending this month, reversing its earlier forecast of a ¥360 billion profit. If confirmed, it would mark Honda’s first annual net loss since becoming a public company in the 1950s.

Honda said the losses stem partly from its decision to cancel three electric vehicle models planned for North America: the Honda 0 SUV, Honda 0 Saloon and the Acura RSX.

President Toshihiro Mibe said EV demand in the U.S. was “less than half of what we were assuming,” as policy changes under the Trump administration rolled back regulations and subsidies supporting battery-powered vehicles.

Honda also recorded impairments in China, saying it struggled to keep pace with the speed and software capabilities of local EV rivals. The company plans to focus more on hybrid models for the U.S. market while reassessing its broader EV strategy.

The write-downs add to more than $65 billion in charges across the global auto industry as manufacturers rethink EV investments. Carmakers including Stellantis and Ford Motor Company have also recorded multibillion-dollar losses tied to cancelled electric vehicle projects.

Mibe said he would return 30 percent of his monthly salary for three months following the losses, while automobile division executives will return 20 percent of their pay. Honda said it has yet to decide whether its planned electric vehicle project with Sony for the U.S. market will proceed. (NewsWire)

The post Honda posts first annual loss since 1950s, warns of $15.7 billion EV hit appeared first on Newswire.