Honda announced yesterday it is dropping its targets for EVs to account for 20% of new car sales by 2030
Honda Motor posted its first annual loss since listing on the stock market in 1957, after massive restructuring costs for its electric-vehicle business pushed the company deep into the red.
The Japanese automaker reported an operating loss of $2.63 billion for the year ended March, following a $10 billion EV investment that failed to deliver.
Honda joined Ford and GM in reporting losses tied to EV investments, saying it overestimated demand. The company said the end of US tax incentives, rising pressure from Trump tariffs, and fierce competition from China squeezed profitability.
The company announced yesterday it is dropping its targets for EVs to account for 20% of new car sales by 2030 and for a full transition to electric or fuel-cell vehicles by 2040.
Chief Executive Toshihiro Mibe also announced that the company would indefinitely suspend its planned $11 billion EV and battery project in Canada.
But Honda’s business goes far beyond cars. Despite weak demand and falling vehicle sales in China, the automaker’s profitable motorcycle business helped cushion the blow.
Strong sales in India and Brazil supported record motorcycle revenue, and Honda expects to return to profit this fiscal year through cost cuts and motorcycle growth.
Despite the losses, Honda shares jumped more than 7% on Friday as investors welcomed the company’s stronger-than-expected profit outlook.