Honda Motor Co. is preparing for its first annual loss since its stock market listing in 1957 after announcing massive restructuring costs in its EV division. The company said the charge could reach as high as 2.5 trillion yen, equivalent to about $15.7 billion. The decision reflects weaker-than-expected global demand for electric vehicles. The shift has forced Honda to rethink parts of its expansion strategy.
The automaker confirmed that three electric vehicle models intended for production in the United States will no longer move forward. Analysts had expected some adjustments to the EV program. However, the scale of the write-down caught many experts off guard. It suggests that the company’s previous EV ambitions may have been too aggressive.
CEO Toshihiro Mibe said declining EV demand has made sustaining profitability extremely difficult. Honda is also writing down the value of its operations in China. The company faces intense competition there from domestic electric vehicle manufacturers like BYD.
The company now expects to record a loss of up to 570 billion yen for the fiscal year ending in March. Earlier projections had predicted a profit of around 550 billion yen. Investors reacted quickly, pushing down the company’s US-listed shares during premarket trading.
The challenges facing Honda mirror a broader trend in the global auto industry. Companies including Ford, General Motors, and Stellantis have all announced major EV-related write-downs. Honda plans to strengthen its product lineup in India and reveal a revised long-term strategy next year.