Honda Forecasts $3 Billion Loss, First Annual Deficit in History

[Company Financial Report] Honda forecasts a net loss of JPY 182–300 billion (approximately USD 1.2–2.0 billion) for fiscal year 2025, marking its first annual deficit since going public nearly 70 years ago.

Core Development: Sudden Electric Strategy Reversal Triggers Massive Losses

Honda has canceled development of three all-electric vehicle models planned for North America and is conducting a comprehensive reassessment of its electrification roadmap. Previously, President Toshihiro Mibe had set an ambitious target to phase out internal combustion engines entirely by 2040; however, the company has now significantly scaled back this goal and shifted focus toward strengthening hybrid-electric technologies.

Key Figures: Losses Could Exceed RMB 100 Billion

Due to this strategic pivot, Honda anticipates cumulative losses of up to JPY 2.5 trillion (approximately RMB 108.2 billion or USD 16.3 billion), with a projected net loss of JPY 690 billion (approximately RMB 30 billion or USD 4.5 billion) for fiscal year 2025. In response, senior executives have voluntarily accepted pay cuts—President Mibe will forgo 30% of his monthly salary for three months as well as his short-term bonus.

Industry Impact: Japanese Automakers’ EV Transition Suffers Another Setback

Following the announcement, Honda’s U.S.-listed shares plunged over 8% in pre-market trading and closed down 5.27%. This move signals a broader slowdown among Japanese automakers in pursuing pure electric vehicle strategies, with renewed emphasis being placed on hybrid technology.