Honda Posts First Annual Loss in 68 Years Amid $10B EV Strategy Misstep

Honda Motor Co. has issued a profit warning for fiscal year 2025, forecasting a net loss of between ¥420 billion and ¥690 billion (approximately RMB 11.6 billion to RMB 24.7 billion)—its first annual loss since going public in 1957. The primary cause is a misjudgment in its electrification strategy, particularly in the North American market, where electric vehicle (EV) demand has reached only half of initial expectations, jeopardizing its original target of selling 2 million EVs annually by 2030. The company has already canceled development of three planned all-electric models for North America and recorded substantial asset impairment and strategic reassessment charges. President Toshihiro Mibe acknowledged that Honda had been overly optimistic about global EV demand and insufficiently agile in responding to changing market conditions. In response, several senior executives, including the president, have voluntarily agreed to salary reductions: the president and executive vice presidents will return 30% of their monthly salaries for three months and forgo their performance-based bonuses for fiscal year 2026; other executive officers will take a 20% pay cut and waive their short-term incentives. These measures will take effect for three months starting in fiscal year 2026.