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Honda EV reset leads to $2.7b annual loss
Honda posted its first full-year loss since going public in 1957, reporting a net loss of 424 billion yen (US$2.68 billion) for fiscal 2025 ended in March.
The loss followed a 1.6 trillion yen (US$9.99 billion) hit to its EV business as weaker demand and changes to US subsidies forced the company to reset its strategy.
The automaker reported a 414 billion yen (US$2.62 billion) operating loss for the year ended in March.
It forecast 500 billion yen (US$3.16 billion) in operating profit and 260 billion yen (US$1.64 billion) in net profit for the current year, while still expecting about 500 billion yen in EV-related losses.
🔗 Source: The Japan Times
🧠 Food for thought
Implications, context, and why it matters.
Setbacks in China and North America drove the EV pullback
- Honda changed course after scrapping three EVs planned for North America, the Honda 0 SUV, Honda 0 Saloon, and Acura RSX 1.
- In China, Honda lost ground to newer EV rivals in software-defined vehicle (SDV) technology. These are cars whose features rely heavily on software. That includes advanced driver-assistance systems (ADAS), which help with lane-keeping and braking 1.
- Honda still kept its u00a52 trillion investment plan for software-defined mobility. Honda R&D treats that work as a central focus 2.
- S&P Global Ratings, a credit ratings agency, cut Hondau2019s long-term rating to BBB+ from A-. It expects EV losses, tariffs, and tougher competition to weigh on margins and cash flow until recovery starts in 2027 3.
Investors backed the shift as India moved to the center
- Honda shares rose 4.2% in Tokyo after the change 4.
- The wider car industry is also reworking its plans. Carmakers are chasing a more profitable mix of electric, hybrid, and combustion-engine vehicles 3.
- Honda now puts India alongside North America and Japan as one of its three core global markets 5.
- Honda said its long-used “global standard” approach, which aimed for worldwide consistency, may not have matched Indian demand. India-focused strategic models are due from 2028 5.
