Honda Motor Co. has forecast its first annual loss in nearly 70 years as a publicly listed company after announcing a major restructuring of its electric vehicle business. The Japanese carmaker said it could face charges of up to 2.5 trillion yen, equivalent to roughly $15.7 billion. The adjustment reflects weaker-than-expected demand for electric vehicles worldwide. The development highlights growing uncertainty in the EV market.
The company confirmed that three electric vehicle models planned for manufacturing in the United States will be canceled. Analysts had predicted some financial adjustments related to Honda’s EV investments. However, the complete cancellation of the U.S. production plan surprised market observers. Industry experts say it shows how dramatically market conditions have shifted.
Chief executive Toshihiro Mibe explained that declining demand has made the EV business increasingly difficult to sustain profitably. Honda is also adjusting the valuation of its operations in China. Competition from advanced electric vehicles produced by companies such as BYD has intensified pressure on international brands. Chinese manufacturers have been expanding rapidly with technology-focused vehicles.
Honda now expects to post a loss of up to 570 billion yen for the fiscal year ending in March. Earlier forecasts had projected a 550 billion yen profit for the same period. The shift represents a major financial setback for the company. Following the announcement, Honda’s US-listed shares dropped roughly 8 percent in premarket trading.
Across the industry, automakers are reassessing their electric vehicle strategies. Companies including Ford and Stellantis have also reported large write-downs related to EV investments. Despite the difficulties, Honda sees opportunities in markets such as India and plans to reveal a revised long-term strategy next year. Executives have also agreed to temporary pay reductions as part of the response.