TOKYO - Honda said it expects to post its first net loss since going public in the fiscal year ending March 2026, underscoring the heavy cost of its abrupt retreat from electric vehicle expansion.
The company estimates losses could swell to as much as 2.5 trillion yen following the cancellation of EV projects in North America. Honda's once-bold pledge to make EVs and fuel-cell vehicles account for 100% of global sales by 2040 has now been significantly revised as market conditions shifted faster than expected.
Attention is turning to the automaker's restructuring plan, due in May, which is expected to outline how Honda intends to rebuild its struggling four-wheel business.
Analysts say Honda has been hit by declining global sales, weak profitability compared with rivals such as Toyota, and an overreliance on a limited number of successful models in Japan, particularly the N-Box minicars.
The cancellation of several next-generation EV models planned for North America, as well as the suspension of the Afeela project developed through a joint venture with Sony, has further darkened investor sentiment.
Honda shares have fallen about 10% since the company announced its EV withdrawal in mid-March. Its price-to-book ratio has slipped to around 0.4 times, far below the level generally seen as fair market valuation.
Investors had already viewed Honda's low valuation as a concern before the latest write-downs. Questions are now emerging over whether shareholder returns, including buybacks and dividend measures, can be maintained.
Industry observers say the strategic reversal was painful but unavoidable.
Honda had invested heavily in EVs, yet demand outside China and Europe remains weaker than expected. In the United States, where Honda depends heavily on earnings, EV adoption has slowed despite earlier policy support under the Biden administration.
Compared with Toyota and Nissan, Honda had set one of the most aggressive electrification targets among Japanese carmakers. But unlike rivals with strong positions in large pickup trucks and SUVs — segments slower to electrify — Honda was more exposed to passenger-car categories where EV investment appeared essential.
Even so, Honda's engineering culture remains evident in its latest launch: the new EV model known as the 'Super One.'
The compact vehicle adopts styling cues inspired by the City Turbo II, the 1983 model nicknamed the 'Bulldog.' The retro design is aimed largely at male buyers aged 50 and older who remember Honda's performance-oriented past.
The Super One offers a driving range of 274 kilometers and weighs roughly 1,090 kilograms, making it notably light for an EV. Test drivers said the car handled nimbly and delivered responsive acceleration and braking.
One of its most distinctive features is an artificial engine soundtrack that changes with speed. Speakers create simulated revving sounds, while a digital tachometer moves in sync, offering a gasoline-car feel in an electric package.
Honda appears to be targeting enthusiasts who still love traditional engine cars but are curious about EV performance.
Analysts praised the model's originality, saying only Honda could produce such an entertaining EV. At the same time, they questioned whether it could become a profitable mass-market product.
The Super One may showcase Honda's character, but the larger challenge remains clear: turning that engineering flair into sustainable earnings.
Source: テレ東BIZ
