Honda's electric vehicle plan was supposed to be the bridge to its next 30 years. It just cost the company its first annual loss in 70.
The Japanese automaker reported a $2.7 billion loss this week, driven by $9 billion in restructuring charges tied to a global EV strategy that no longer matches reality.
CEO Toshihiro Mibe blamed the loss on falling EV demand and policy shifts in the United States, after the Trump administration rolled back the $7,500 EV tax credit and blocked California's stricter EV mandates earlier this year.
Mibe also scrapped Honda's target for EVs to make up 20% of new car sales by 2030, and the company is indefinitely suspending an $11 billion plan to build EVs and batteries in Canada.
EV-related losses on Honda's books are still climbing, with the total bill expected to reach $16 billion before the restructuring is finished.
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Honda is the latest legacy automaker hit by the same wave. General Motors took a $7.1 billion EV-related charge in late 2025, Ford absorbed a $17.4 billion charge, and Stellantis posted a charge of roughly $29.7 billion.
Honda did manage one bright spot: motorcycle sales held up well enough to push the company's full-year revenue to about $138 billion, a half-percent increase from the year before. The Super Cub motorcycle remains Honda's flagship product in markets like India, where Honda is the top motorcycle seller.
Vehicle sales told a different story, falling to 3.4 million units worldwide for the year through March, down from 3.7 million the year before.
Even with the loss, Honda is forecasting a $1.7 billion profit for the fiscal year through March 2027, as it leans back into hybrids and gas engines while keeping a smaller EV research effort going.
How fast Honda can pivot from EV-first to hybrid-first - and whether other Japanese automakers like Toyota and Nissan use the same playbook. The EV transition isn't dead, but the timeline just got rewritten by a long stretch.
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