Honda Faces First-Ever Loss After Scrapping Key EV Plans
Honda is preparing for something no one saw coming. The Japanese automaker expects to report its first net loss since going public in 1957, with projections suggesting a hit of up to 2.5 trillion yen ($15.7 billion). The main driver is a sharp reversal in its electric vehicle strategy, particularly in North America, where three EV projects, excluding its Sony collaboration, have now been scrapped.
EV Slowdown Hits Hard
Honda's decision to cancel key EV programs has triggered massive write-downs, says TV Tokyo BIZ Digest. Honda had once committed to a fully electrified future by 2040, but slowing EV demand has forced a rethink. EV sales in the US declined by 41% in January 2026, year-on-year, and the expected surge in adoption has not materialised at the pace many automakers had anticipated. The decline in demand, combined with Honda's retreat from America's EV space, has resulted in the recent cancellation of the project between Honda and Sony, called the Afeela 1 electric sedan.
Industry-Wide Reality Check
Honda is not alone. Reuters reports that automakers have collectively written off $55 billion due to EV-related projects, with Stellantis responsible for $26.3 billion and General Motors$8.5 billion. Even brands that once pushed aggressive electrification timelines are now easing off. While plans to introduce an affordable EV remain on the table for Ford, it and others like Kia, Nissan, and Porsche have all scaled back or delayed EV plans after overestimating EV demand. Instead, many are shifting their focus to hybrids, PHEVs, and EREVs.
What Comes Next for Honda
Honda has faced a turbulent few months, from the controversial return of the Prelude to talks of collaborating with Nissan on a North America-focused project. After cancelling the three US-bound EVs: the Honda 0 Saloon, Honda 0 SUV, and the Acura RSX, it seems the US won't be getting any new Honda models until 2027. That said, its ICE-powered lineup still holds strong appeal, with models like the Civic continuing to sell strongly. Honda's next move will focus on balancing electrification with ICE power, while still working toward its long-term goal of carbon neutrality by 2050.
Copyright 2026 The Arena Group, Inc. All Rights Reserved.
This story was originally published April 23, 2026 at 4:15 PM.