By Micah Jonah, March 12, 2026
Japanese automaker, Honda Motor Co. has warned it could record its first annual loss in nearly seven decades as a publicly listed company after announcing a massive $15.7 billion charge linked to its electric vehicle business.
The company said the restructuring costs stem from its decision to cancel three electric vehicle models previously planned for production in the United States. The move reflects weakening demand for electric vehicles and shifting market conditions affecting the global automotive industry.
Honda Motor Co. said the charge could reach as high as 2.5 trillion yen, pushing the company to forecast a loss of up to 570 billion yen, equivalent to about $3.6 billion, for the fiscal year ending in March. The company had earlier projected a profit of about 550 billion yen.
Chief Executive Officer, Toshihiro Mibe said demand for electric vehicles has fallen more sharply than expected, making it difficult for the company to sustain profitability under its previous expansion plans.
The company is also writing down the value of parts of its operations in China, where competition from domestic manufacturers such as BYD Company has intensified due to advanced software driven vehicle technology.
Industry analysts say several global automakers are reassessing their electric vehicle strategies as demand slows and production costs remain high.
Automotive giants including Ford Motor Company, Stellantis and General Motors have also reported large write downs tied to their electric vehicle investments in recent months.
Following the announcement, shares of Honda Motor Co. listed in the United States fell by about eight percent in pre market trading.
The company said it plans to focus on strengthening its vehicle lineup and improving cost competitiveness in key markets such as India while preparing to unveil a new long term business strategy in the coming fiscal year.
Executives, including CEO Toshihiro Mibe and Executive Vice President Noriya Kaihara, will also take temporary pay cuts as part of the company’s response to the financial setback.
