Honda flags $1.7b EV charges, reviews its EV strategy

Honda Motor Co. reported one-time EV-related expenses of ¥267.1 billion (US$1.7 billion) in the nine months ending December 31, plus a ¥279.5 billion (US$1.79 billion) impact from US import duties.

The automaker cited slowing EV growth, trade protectionism, supply chain risks, and rising global competition as reasons to reassess its strategy.

Honda’s executive vice president said the expected electrification has not materialized, prompting a review of EV rollout timing in North America.

Despite auto challenges, Honda’s motorcycle sales hit a record 16.4 million units in nine months, supporting an operating profit of ¥546.5 billion (US$3.5 billion) that offsets car business losses.

🔗 Source: Bloomberg

🧠 Food for thought

Implications, context, and why it matters.

Tariffs and slower demand push Honda to trim long-term electrification spending

Honda says the shift changes near-term priorities, while its long-term electrification plan stays intact but moves later on the calendar 1.
Planned spending on electrification drops by ¥3 trillion, from ¥10 trillion to ¥7 trillion through the fiscal year ending in 2031 1.
The 2030 global EV sales goal also falls. Honda now puts EVs at about 20% of global sales, down from 30% 2.
Hybrids take a bigger role, with a target of 2.2 million hybrid sales by 2030 3.
“US import duties” refers to tariffs hitting Honda’s U.S. business. Separately, Honda said it is moving some CR-V production from Canada to the U.S. to “minimize the impact of tariffs.” It also said CR-Vs will still be built in Canada, plus there are no plans to reduce Honda of Canada manufacturing volume or employment 4.

Motorcycles help Honda keep profits steady as EV plans shift

Pressure on the car business from EV demand and tariffs contrasts with a motorcycle unit that keeps profits resilient 1.
Honda sold about 20.6 million two-wheelers in fiscal 2025. It estimates about 40% of a global market it expects to reach 60 million units by 2030, with a longer-term aim of 50% share 2.
Motorcycle earnings supply cash as the auto side manages higher EV costs plus tariff exposure 1.
That cushion supports a faster ramp in hybrids while the EV market cools 3.