Honda factory workers on a production line, reflecting uncertainty.
Honda Motor has announced its first-ever annual loss since its stock market debut in 1957. The Japanese automaker incurred $9 billion in restructuring costs, largely attributed to a significant decline in electric vehicle (EV) demand and policies such as those promoted by former President Donald Trump’s “Made in America” initiative.
“EV demand has declined considerably, due to the rollback of environmental regulations in the U.S. and other factors,” Honda stated. CEO Toshihiro Mibe revealed that the company, which posted a $2.7 billion loss, is abandoning its previous target of making EVs 20% of its profits by 2030. The company had also aimed for a complete transition to electric or fuel-cell vehicles by 2024.
Losses specifically tied to its electric vehicle operations are projected to reach $16 billion. The Trump administration’s policies, including the reversal of California’s stringent EV mandates and the removal of former President Joe Biden’s EV tax credit, have been cited as contributing factors.
Despite these challenges, Honda’s motorcycle sales saw a substantial increase, contributing $138 billion for the fiscal year ending March, a 0.5% rise. The company sold 3.4 million vehicles globally during the same period, a decrease from 3.7 million the previous year. Honda is a leading motorcycle seller in markets like India.
Looking ahead, Honda forecasts a profit of $1.7 billion for the fiscal year through March 2027. “We will continue our research to develop future technologies including electric vehicle batteries,” Mibe stated. “We will get back on a growth track,” he added, acknowledging the need to also focus on hybrid and traditional gasoline-engine models while pursuing carbon neutrality.
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