Honda Motor on Thursday reported its first annual loss since becoming a publicly traded company in Japan seven decades ago, as the costly retreat from its ambitious electric-vehicle targets plunged earnings into the red.
The Japanese automaker reported a net loss of $2.7 billion for the fiscal year ended March 31. Earnings were weighed down by more than $9 billion in restructuring charges and write-downs following a retrenchment of its E.V. strategy. It is the first loss that the 77-year-old company has reported since listing on the Tokyo Stock Exchange in 1957.
The sharp downturn underscores the extent to which Honda — and many other automakers that poured billions into electric vehicles — has been buffeted by cooling demand.
Just five years ago, Honda was racing to catch up to Tesla and Chinese rivals such as BYD in building 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 throw its weight behind hybrid and gasoline-powered cars. Honda began allocating billions to develop battery-powered cars both in-house and in partnerships with General Motors and Sony.
However, consumers were not quite ready. After an initial wave of early adopters propped up sales, some other mainstream buyers balked, largely because of lingering concerns about charging infrastructure and high sticker prices. Then, last year, federal subsidies for many electric models were effectively gutted under the Trump administration.
In 2025, electric vehicle sales fell about 4 percent from a year earlier in the United States, Honda’s biggest automotive market. That ended a half-decade-long, record-breaking growth streak for electric cars. The slowdown has also weighed on American majors. 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 Chief Executive Toshihiro Mibe announced the cancellation of three major electric models originally destined for the North American market. An affordable line that Honda was developing with General Motors and a software-laden vehicle it was codeveloping with Sony have been put on ice.
River Akira Davis covers Japan for The Times, including its economy and businesses, and is based in Tokyo.
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