Honda Motor Co. has warned investors it may record its first annual loss since listing on the stock market in 1957. The company revealed restructuring costs of up to 2.5 trillion yen linked to its electric vehicle business. Slower demand for EVs has forced automakers worldwide to reconsider aggressive expansion plans. Honda’s announcement underscores the changing dynamics in the global automotive market.
The Japanese automaker confirmed it is canceling three electric vehicle models originally planned for production in the United States. Analysts had expected some financial impact from the EV transition. However, the scale of the write-down exceeded most forecasts. Experts say the cancellation indicates a major strategic shift.
Chief executive Toshihiro Mibe said declining EV demand has made it extremely difficult to maintain profitability in the segment. Honda is also writing down the value of its operations in China. There, competition has intensified from domestic brands such as BYD, which produce technologically advanced electric vehicles. These companies have gained strong momentum in recent years.
Financially, Honda now expects a loss of up to 570 billion yen for the current fiscal year. The company had previously predicted a profit of around 550 billion yen. The dramatic shift highlights the impact of market changes on long-term investment strategies. Investors responded quickly, pushing down the company’s US-listed shares.
The wider automotive industry is experiencing similar financial adjustments. Companies including Ford and General Motors have also reported billions in EV-related write-downs. Despite these challenges, Honda plans to strengthen its presence in India and improve cost competitiveness. A revised long-term strategy is expected next year.