Honda Makes First Annual Loss in 70 Years Japanese automaker Honda reported its first annual loss in 70 years, marking a significant shift in the company’s financial trajectory. The loss, totaling ¥423bn ($2.68bn; £1.99bn) for the fiscal year ending March 2026, was attributed to underwhelming demand for electric vehicles (EVs) and a series of strategic and external challenges. The company had previously invested heavily in transitioning to EV production, but the results have not aligned with its expectations. Honda’s financial struggles stem from several factors. The company scrapped some of its EV production targets and opted to source parts from China, where manufacturing costs are lower. This decision was partly driven by the impact of U.S. policies, which have created additional financial pressure. In September 2025, President Donald Trump eliminated tax incentives for U.S. consumers purchasing EVs, previously offering up to $7,500 (£5,500) in tax credits. Additionally, tariffs imposed on imported cars and auto parts in 2025, though reduced from 25% to 15%, still affected profitability for major automakers, including Honda. The company’s ambitious goals for EV adoption also faced setbacks. Honda had aimed to have EVs account for a fifth of its new car sales by 2030 and for all vehicles to transition to electric by 2040. However, the CEO, Toshihiro Mibe, announced the abandonment of these targets, citing the need to recalibrate the company’s strategy. Honda now plans to focus on its motorcycle business, financial services, and hybrid vehicle manufacturing. The firm emphasized North America, Japan, and India as key markets for future growth, though it suspended plans to build EVs and batteries in Canada. The financial outlook for Honda remains challenging.#donald_trump #honda #toshihiro_mibe #aj_bell #danni_hewson
