TLDR
- Honda disclosed a massive write-down reaching $15.7 billion (2.5 trillion yen) connected to revising its electric vehicle approach
- The company will report its first yearly loss since going public in 1957, shifting from an expected 550 billion yen profit to a 570 billion yen deficit
- Three electric vehicle models intended for United States manufacturing have been eliminated entirely
- Shares of Honda (HMC) trading in the United States declined approximately 8% during premarket hours
- Total EV-related write-downs across the automotive sector have surpassed $67 billion when combining Honda, Ford, GM, and Stellantis
Honda Motor has disclosed one of the automotive industry’s largest single write-downs in history, revealing up to $15.7 billion in charges connected to a comprehensive restructuring of its electric vehicle approach.
The Japanese manufacturer said it anticipates losing up to 570 billion yen ($3.6 billion) during the fiscal year concluding in March 2026. This reverses an earlier profit projection of 550 billion yen and represents Honda’s first yearly deficit since becoming publicly traded in 1957.
Shares of Honda listed in the United States fell approximately 8% during premarket trading Thursday after the company made its announcement.
The financial charges stem from what Honda characterized as a “reassessment of automobile electrification strategy.” Translation: a shift toward fewer battery-electric vehicles, increased hybrid focus, and reduced expansion plans in America.
Honda is eliminating three battery-electric models that were scheduled for manufacturing in the United States. Market analysts had anticipated additional EV-related financial impacts, but complete cancellation of these models surprised many observers. Julie Boote, autos analyst at Pelham Smithers Associates, described the magnitude of the write-down as “a surprise,” observing that Honda had an “ambitious EV expansion plan, which was badly affected by the changing market environment.”
CEO Toshihiro Mibe stated that demand for battery-electric vehicles had declined dramatically, rendering profitability “very difficult” to maintain in that business segment. Both he and Executive Vice President Noriya Kaihara will voluntarily forfeit 30% of their salaries for three months in response.
Industry-Wide EV Pain
Honda’s financial charge brings the automotive sector’s total EV-related write-downs to approximately $67 billion. Ford has recorded $19 billion in charges tied to electric vehicles, Stellantis $25 billion, and GM $7.6 billion — with General Motors indicating additional charges may be forthcoming.
The aggregate market capitalization of GM, Ford, Stellantis, and Honda stands at approximately $180 billion, highlighting the magnitude of these financial losses.
These write-downs stem from excessive optimism regarding electric vehicle adoption. Tesla’s explosive expansion between 2020 and 2023 — with deliveries increasing more than threefold — prompted competitors to expect the market would maintain similar growth rates. Rivian’s November 2021 public offering, which temporarily valued the startup near $160 billion, reinforced forecasts suggesting Americans would purchase 3 million EVs in 2025.
The reality: 1.3 million — unchanged from 2024, representing approximately 8% of total new vehicle sales in the United States.
Policy Shifts Hit Hard
The Trump administration’s reversal of electric vehicle incentives has intensified the challenges. The $7,500 tax credit for EV purchases was removed in September, and industry analysts project U.S. EV sales could decline 50% in 2026 as a consequence.
Honda also acknowledged write-downs related to its Chinese operations, where the company has found it challenging to compete with software-driven competitors like BYD.
The automaker says it will concentrate on expanding its vehicle portfolio in India, a market where Chinese manufacturers face significant barriers — comparable to the United States.
Honda intends to unveil a revised medium-to-long-term business plan during the upcoming fiscal year. As of Thursday’s premarket session, HMC stock was trading down approximately 8%.
