Honda Reports First Annual Loss in 70 Years as EV Bets Fail
Japanese car giant Honda has made its first annual loss in 70 years. Its investments in the electric vehicle (EV) market failed to pay off. Demand for EVs has not been as strong as the company forecast. Honda reported a total operating loss of ¥423bn for the year ending March 2026. That equals $2.68bn or £1.99bn.
Scrapping Targets and Sourcing from China
The firm said it was scrapping some of its EV production targets. It will also source parts from China, where prices are lower, to keep costs down. Honda cited changes in US policy as adding to its losses. Tax incentives for US EV buyers were removed. Tariffs were also imposed.US consumers previously received up to $7,500 in tax credits for new EVs. President Donald Trump scrapped that in September 2025. His tariffs on imported cars and auto parts in 2025 also hurt profits. Tariffs were later reduced from 25% to 15%, but damage was already done.
Focusing on Motorcycles and Hybrids
Honda was first listed on the stock market in 1957. It has grown to become Japan’s second largest car firm. Analysts said its huge size makes it difficult to adapt quickly to changes in EV demand. Honda now plans to focus on its successful motorcycle business, its financial services, and hybrid vehicle manufacturing.
