Honda Motor Co., Ltd. has announced the cancellation of three planned electric vehicle (EV) models for the North American market as part of a reassessment of its automobile electrification strategy. The decision comes in response to changes in the business environment, including shifting U.S. policies and intensified competition in Asia.
The company expects to record significant losses in its consolidated financial results for the fiscal year ending March 2026. These losses stem from write-offs and impairment of assets related to the canceled EV models, including the Honda 0 SUV, Honda 0 Saloon, and Acura RSX, as well as additional expenses from halting their development and sales.
Honda's profitability has been impacted by unfavorable U.S. tariff policies on gasoline and hybrid vehicles and a decline in competitiveness in Asia. In the U.S., the EV market growth has slowed due to eased fossil fuel regulations and changes in EV incentives. Meanwhile, in China, consumer preferences have shifted towards software-based vehicle features, heightening competition with new EV manufacturers.
Honda now anticipates operating expenses of 820 billion yen to 1.12 trillion yen and a share of loss from equity method investments in China ranging from 110 billion yen to 150 billion yen. Special losses in non-consolidated financial results are projected between 340 billion yen to 570 billion yen. Overall losses could reach up to 2.5 trillion yen, although this estimate involves risks and uncertainties.
Despite the financial setbacks, Honda has not revised its forecast for dividends per share, maintaining its commitment to stable shareholder returns. The company plans to focus on strengthening its hybrid models and enhancing competitiveness in key markets, including Japan, the U.S., and India.
Honda aims to reorganize its strategic framework to adapt to rapid changes in the business environment. The company will continue to explore the introduction of future EV models while balancing profitability and market trends. Details of Honda's mid- to long-term strategy for its automobile business will be announced at a press conference in May.
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