Honda Motor on Thursday reported its first annual loss since becoming a publicly traded company in Japan seven decades ago, as a costly retreat from its ambitious electric vehicle goals plunged profits into the red.
The Japanese automaker reported a net loss of $2.7 billion for the fiscal year that ended March 31. Profits were hit by more than $9 billion in restructuring charges and writedowns following a reduction in its electric vehicle strategy. It is the first loss the 77-year-old company has reported since it was listed on the Tokyo Stock Exchange in 1957.
The sharp slowdown underscores the extent to which Honda – and many other automakers that have invested billions in electric vehicles – have been hit by cooling demand.
Just five years ago, Honda was racing to catch up with Tesla and Chinese rivals like BYD in making electric cars. It pledged to make its entire lineup electric or hydrogen-powered by 2040, a break from other Japanese automakers like Toyota, which continued to support hybrid and gasoline cars. Honda began allocating billions to develop battery-powered cars, both internally and in partnership with General Motors and Sony.
However, consumers were not fully prepared. After an initial wave of early adopters underpinned sales, some other mainstream buyers held out, largely due to lingering concerns about charging infrastructure and high sticker prices. Then last year, federal subsidies for many electric models were effectively eliminated under the Trump administration.
In 2025, electric vehicle sales fell about 4 percent from a year earlier in the United States, Honda's largest automotive market. That ended a record half-decade growth streak for electric cars. The slowdown has also affected large American companies. Earlier this year, Ford said its electric vehicle division lost $4.8 billion in 2025 and would likely continue to lose money for at least two more years.
In March, Honda CEO Toshihiro Mibe announced the cancellation of three major electric models originally intended for the North American market. An affordable line that Honda was developing with General Motors and a software-laden vehicle it was co-developing with Sony have been frozen.
