Honda revealed today faces a potential $15.8 billion loss and it will cut three electric vehicles designed for the U.S. market as a result as it looks for ways to improve its 2026 fiscal year results.
The company is cutting Honda 0 SUV as well as Honda 0 sedan, plus the Acura RSX, as part of a larger restructuring of its broader electrification plans. Honda is hoping to take a bite out of that possible $15.8 billion loss.
“Honda determined that starting production and sales of these three models in current business environment where the demand for EVs is declining significantly would likely result in further losses over the long term,” the company said in a statement.
The Japanese automaker joins a long list of automakers scaling back their EV plans, including Ford, General Motors, Stellantis, Hyundai and Volkswagen. The new models were set to be produced in Ohio. Honda spent billions to update the plants to handle the new vehicles, which were expected to hit the U.S. market next year.
Adding to the company’s woes this fiscal year, which ends March 31, Trump administration tariffs cut into the profits of its gas and hybrid vehicles. While the U.S. market has suddenly become more difficult, Honda’s fallen behind competitors in the Asian market due to its investment in EV development, officials noted.
“In contrast, the EV market has expanded in China,” said Toshihiro Mibe, the newly appointed director, president and representative executive officer, during a press conference. “However, product launches, electrification, and application of more intelligent technology have progressed at a speed beyond our expectations.
“As a result, we are facing strong competition from emerging OEMs, and the competitive environment has become increasingly challenging also in ASEAN (Southeast Asian) markets.”
Officials say they will refocus on hybrids as part of its push to return to profitability.
Honda Executive Vice President Noriya Kaihara, said the company will “introduce new hybrid models as soon as possible toward the second half of the 2020s, through which we will improve near-term profitability and further strengthen the foundation of our automobile business.”
Additionally, the company will refocus efforts in India, which many view as a burgeoning market, plus the company’s top executives plan to return part of their compensation. Mibe and Kaihara will be docked 30 percent of their compensation for three months while Executive Council members and Managing Executive Officers will have 20 percent withheld for three months.
[Images: Honda]
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