Honda has posted an annual loss for the first time in its nearly 70-year history and has scrapped its long-term EV sales target.
This comes after the automaker was hit by more than US$9 billion in costs to restructure its electric-vehicle business.
It also marks its worst financial report since Honda was listed on the stock market in 1957, underscoring how risky an aggressive bet on EVs can be when slammed with weaker-than-expected demand.
Following this, Honda CEO Toshihiro Mibe said the company was scrapping its goal of having EVs account for a fifth of its new-car sales in 2030, as well as its target of a full shift to electric- or fuel-cell-vehicle sales by 2040.
Mibe said Honda will also indefinitely suspend its Canada EV project, an $11 billion investment plan to produce EVs and batteries in what would have been the Japanese firm's largest-ever investment in the country.
The total EV-related losses for the fiscal year ended March 2025 came in at 1.579 trillion yen (US$10 billion), leading to an operating profit loss of 414.3 billion yen.
“Although the automobile business faced a harsh business environment — including higher tariff burdens and lower unit sales due to factors such as semiconductor supply shortages — we implemented company-wide cost reductions as one team, and excluding EV-related losses, we were profitable,” the company said in its presentation.
Though EV-related losses in the upcoming March 2027 FY will be 500 billion yen ($3.168 billion), the company still sees operating profit at 500 billion yen.
This surpasses Bloomberg's expectations of 212.4 billion yen.
Honda's shares briefly hit a two-month high before closing up 3.8% on Thursday, after it pledged at least 800 billion yen in shareholder returns over three years and kept the annual dividend for both the new fiscal year and the year just ended at 70 yen per share.
