While losses from electric vehicles (EVs) are not as large as those recently posted by Ford (A$11.5 billion) and Stellantis (A$35 billion), the auto division of Honda remains in the red, prompting the automaker to change strategy.
For the nine months ended December 2025, Honda’s automotive division reported an operating loss of ¥166.4 billion (A$1.5 billion), which includes a ¥267.1 billion (A$2.5 billion) charge related to tariffs in the United States and one-time expenses related to electric vehicles.
Accordingly Automotive NewsThe automotive division posted losses for four quarters in a row. Thanks to strong results from its motorcycle division and financial services division, Honda is still in the black overall, with profits of ¥591.5 billion (A$5.4 billion).
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When asked how the company will respond to the ongoing automotive losses, Noriya Kaihara, Executive Vice President at Honda, told the media: “Although our ultimate goal (carbon neutrality by 2050) remains unchanged, the path to achieving this goal is evolving into a different form than what we had previously imagined.”
Kaihara-san said Honda “we will carefully reassess the timing of electric vehicle introduction” by “taking into account regional market conditions.”
Since the US$7,500 (AUD$10,500) federal electric vehicle tax rebate ended in September 2025, US electric car sales have plummeted, and the automaker does not expect a recovery in the near future. Accordingly, Honda will “focus its resources on ICE and HEV models instead.”
GM is currently producing the Prologue for Honda, and the Japanese automaker has set aside 20 billion yen (A$180 million) to compensate the general for lower-than-expected orders and sales.
Honda admits that this pot of money “may prove insufficient.” While the Prologue remains in showrooms and is accompanied by cash incentives, Acura has canceled the GM-supplied ZDX due to slow sales.
As for China, where adoption of electric vehicles is much higher, Kaihara-san admits that the company “lags behind local manufacturers in areas such as software and interior technologies.” In doing so, it is turning away from the current “independent approach (towards) a strategy that is more deeply rooted in the Chinese market” and is relying more heavily on “local suppliers”.
Unlike fellow Toyota, Nissan and Mazda, Honda has so far refused to use the EV architecture and technology adopted by its local joint venture partners.
It’s unclear whether Honda will change course here, but Kaihara-san says the focus will be heavily on costs. He says the “know-how gained in China” will then spread to other markets across Asia.
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