Honda Motor has reported its first annual loss in nearly 70 years. The company was hit by $9 billion in electric-vehicle restructuring costs after the demand for EVs slowed down amid mounting US tariffs and competition in China.
US buyers used to get up to $7,500 in tax credits for new EVs. Trump ended the credit in September 2025. His newly implemented tariffs on imported cars and auto parts hurt profits at major automakers.
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Honda CEO Toshihiro Mibe said the company is dropping its target of having EVs account for 20% of new car sales by 2030. They are also abandoning their goal of shifting entirely to electric or fuel-cell vehicle sales by 2040, reported Reuters.
He added that Honda will indefinitely suspend its Canada EV project. The $11 billion plan to build EVs and batteries would have been the Japanese firm's biggest investment ever in the country, said the report.
As per CNN, Honda's fiscal year ending in March took a 1.6 trillion yen or nearly $10 billion hit. That wiped out what would have been a $7.4 billion profit. Instead, it posted a net loss of 403.3 billion yen, or $2.6 billion. The company expects an additional EV investment written down in the coming fiscal year, though not enough for another loss.
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Despite the sharp downturn, Honda says it expects to return to profitability this year, banking on cost cuts and strong motorcycle sales in markets such as India and Brazil. "The motorcycle business will expand production capacity in India ... and aim for record-high ​sales of 22.8 million units," the company said in an earnings statement.
First listed in 1957, Honda has grown into Japan's second-largest carmaker. The company projects a 313 billion yen hit to operating profit next fiscal year from higher material prices and the Middle East conflict.
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