Honda last week announced plans to scrap the launch of three new EVs as it faces its first annual loss in its nearly 70-year history as a listed company.
The details: The Japanese automaker flagged the record loss Thursday (March 12), revealing it’s facing up to $15.7 billion in restructuring costs tied to its EV business, Reuters reported.
Honda expects to log as much as 1.3 trillion yen ($8.1 billion) of those costs this fiscal year and 1.2 trillion yen ($7.5 billion) the next.
The carmaker is also writing down the value of its China business, where it has faced stiff competition from rivals such as BYD.
Following news of the loss, Honda’s shares closed down 5.6% at 1,368 yen ($8.56), making it the second-biggest decliner on the benchmark Nikkei 225.
Zooming in: The three scrapped vehicles include the Honda 0 SUV, Honda 0 Saloon, and Acura RSX, which were reportedly slated to be the automaker's first EVs built from the ground up.
Honda cited slowing EV demand in the U.S., the easing of fossil-fuel regulations, revisions to EV incentives, and U.S. tariffs as factors in its decision to scrap the models, per Automotive World.
Moving forward, Honda will prioritize next-generation hybrid models in its product strategy, with more details about its future plans set to be announced at a May press conference.
Why it matters: Honda's pullback reflects a broader industry conversation about the pace of EV adoption.
On one side, for those skeptical of aggressive EV timelines, the move validates concerns that mandates and targets have outpaced real-world demand and consumer affordability.
But on the other side, some argue the retreat says more about Honda's ability to compete in an increasingly crowded electrified market, where rivals like Toyota already offer a wide range of hybrid and EV options across nearly every segment.
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