Honda Motor Co. has warned investors it could post its first annual loss since becoming a publicly traded company nearly seven decades ago. The automaker said it expects to record up to 2.5 trillion yen in restructuring costs related to its electric vehicle business. Weak global demand for EVs has forced Honda to rethink parts of its strategy. The development reflects broader challenges across the automotive industry.
The company confirmed that three electric vehicle models planned for production in the United States will be canceled. Analysts had anticipated some financial adjustments. However, the complete cancellation of the production program came as a surprise. It suggests that Honda’s earlier EV expansion plans may have been overly ambitious.
Chief executive Toshihiro Mibe said falling EV demand has made profitability extremely difficult. Honda is also writing down the value of its operations in China. Competition from local companies such as BYD has intensified in recent years.
Honda now expects to report a loss of up to 570 billion yen for the fiscal year ending in March. Previously, the company had forecast a profit of around 550 billion yen. The announcement caused its US-listed shares to drop roughly 8 percent during premarket trading.
The EV slowdown has affected several major carmakers globally. Companies including Ford, General Motors, and Stellantis have also reported large write-downs. Honda says it will strengthen its model lineup and competitiveness in India while preparing a new long-term strategy for the coming fiscal year.