Honda Reports First Annual Operating Loss Since 1957 as EV Strategy Falters

Email:online@newsofbahraim.com

Tokyo: Japanese automaker Honda has reported its first annual operating loss since becoming a publicly listed company in 1957, marking a major setback for the company’s electric vehicle strategy. The loss was driven largely by massive costs linked to restructuring its EV business and weaker-than-expected demand for electric cars.

Honda posted an operating loss of more than 414 billion yen ($2.6 billion) for the financial year ending March 2026, reversing a strong profit recorded the previous year. The company said it absorbed over $9 billion in EV-related charges as it scaled back several ambitious electrification plans.

Chief Executive Toshihiro Mibe announced that Honda is abandoning key long-term EV targets, including plans for electric vehicles to make up 20% of sales by 2030 and a full transition to EVs and fuel-cell vehicles by 2040. The company also indefinitely suspended an $11 billion EV and battery project in Canada.

Honda blamed slowing EV demand, rising competition in China, and policy changes in the United States  including reduced EV incentives for the sharp downturn. Analysts said the results highlight growing challenges facing traditional automakers that invested heavily in electric vehicles expecting faster consumer adoption.

Despite the historic loss, Honda said it expects to return to profitability next year through cost-cutting measures and stronger sales of hybrid vehicles and motorcycles, particularly in markets such as India and Brazil. The company’s shares rose after it pledged major shareholder returns and maintained its dividend.