Honda Forecasts Nearly $4.2 Billion Loss for FY2025, Scales Back EV Strategy in Favor of Hybrids

Honda Motor Co. recently issued a profit warning for fiscal year 2025, forecasting a net loss of ¥420 billion to ¥690 billion (approximately RMB 18.2 billion to RMB 29.9 billion)—its first annual loss since its listing in 1957. The company had previously projected a profit of ¥550 billion, highlighting the stark contrast and underscoring its current operational challenges. The primary cause of the loss is setbacks in its electrification strategy, including the termination of its joint electric vehicle (EV) project with General Motors, the suspension of pure-electric van development in Europe, and related asset impairments and investment losses amounting to as much as ¥2.5 trillion. In response, Honda has drastically revised down its global battery-electric vehicle (BEV) sales target for 2030 from 2 million units to between 700,000 and 750,000 units. The company also expects its electric vehicle business to incur an operating loss of approximately ¥700 billion this fiscal year. To stem losses, Honda is conducting a comprehensive review of its EV strategy, pausing multiple projects, and refocusing on hybrid electric vehicles (HEVs). It plans to launch 13 new-generation HEV models between 2027 and 2030 and is restructuring its R&D system to improve efficiency.