By Kashmira Konduparty
Honda reported its first annual loss since becoming a publicly listed company in 1957. The loss was largely driven by a multibillion-dollar write-down tied to its electric vehicle business and restructuring costs. The company also scrapped several long-term EV goals as demand for electric vehicles weakened, according to a report by the Reuters.
Honda posted an operating loss of 414.3 billion yen ($2.6 billion) for the fiscal year ending March 2026. A year earlier, the company reported profit of around 1.2 trillion yen. The automaker also recorded a net loss of roughly 423.9 billion yen.
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Honda attributed the losses largely to more than $9 billion in EV-related restructuring costs. Honda’s CEO Toshihiro Mibe announced the company would abandon several previous EV targets. Honda dropped its goal of having EVs account for 20% of sales by 2030 and stepped back from plans for a full transition to EVs and fuel-cell vehicles by 2040.
Honda said weakening EV demand, rising costs and U.S. tariffs contributed to the losses. The rollback of EV subsidies and environmental incentives in the United States also hurt the company’s EV expansion plans. Analysts say traditional automakers are facing growing pressure as consumer demand for EVs slows globally.
Honda indefinitely suspended its planned $11 billion EV and battery production project in Canada. The company also canceled multiple EV models planned for North America. Honda is now shifting more focus toward hybrid vehicles instead of fully electric models.
Despite the losses, Honda’s motorcycle division performed strongly. The company reported record motorcycle sales in countries including India and Brazil. Executives said motorcycle demands helped offset part of the financial pressure from its automobile business.
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Honda shares rose after the earnings report despite the historic loss. Investors responded positively to the company’s shareholder return plans and expectations of a recovery next fiscal year. Honda said it expects to return to profitability through cost-cutting and stronger hybrid sales.
Honda’s results reflect the growing uncertainty surrounding the global EV transition as automakers reconsider aggressive electrification plans amid changing consumer demand and government policies. The company’s shift back toward hybrids highlights how legacy automakers are attempting to balance long-term climate goals with near-term profitability and market realities.