Honda Expects Up to 690 B. Yen in Net Loss for FY 2025

Tokyo, March 12 (Jiji Press)–Japan’s Honda Motor Co. said Thursday that it expects to post a consolidated net loss of 420 billion to 690 billion yen in fiscal 2025 ending this month. The automaker revised down its estimate from a net profit of 300 billion yen, reflecting impairment and other losses linked to the cancellation of its development and sale of some electric vehicle models, because the EV market situation in North America deteriorated rapidly. It would be the first time for Honda to incur a group net loss since the company began disclosing consolidated earnings in 1977. Honda expects to log further losses in fiscal 2026 and later, possibly raising its total EV-related losses, including those for the current year, to up to 2.5 trillion yen. “There has been a change in the business environment far greater than what we expected,” Honda President Toshihiro Mibe told an online press conference. “We will face the reality head-on.” He added that the automaker would reconsider its goal of raising the share of EV and fuel cell vehicle sales to 100 pct of all sales by 2040, saying that achieving the target is “realistically difficult.” The company said that Mibe and its executive vice president will voluntarily return 30 pct of their monthly compensation for three months to take responsibility for the red ink. Honda plans to review its strategy for its four-wheel vehicle business and strengthen the development and sales of hybrid vehicles, which are gaining popularity in North America. In the current fiscal year, the company expects to book between 820 billion and 1,120 billion yen in additional expenses, as well as 110 billion to 150 billion yen in investment losses, due to the review of its EV strategy in North America and other factors. Honda now projects a consolidated operating loss of 270 billion to 570 billion yen, down from the previous estimate of a 550-billion-yen profit. It kept its sales forecast unchanged. The canceled EV models under development are the Honda 0 Saloon, the Honda 0 SUV and the Acura RSX, which were slated to hit the North American market in 2026 or later. Honda expects to book in fiscal 2026 or later the costs of compensating parts makers for the cancellation. It also incurred losses caused by sluggish sales in the Chinese market due to fierce competition with local automakers. Demand for EVs is falling in North America, causing U.S. automakers to incur massive losses as well, after U.S. President Donald Trump’s administration abolished a tax incentive introduced under the EV promotion policy of his predecessor, Joe Biden. END [Copyright The Jiji Press, Ltd.]