The bearish EV market has left one of the world’s largest automakers saddled with unprecedented losses.
What happened: Honda is forecasting a net loss of up to ¥690 billion (~$5.9 billion) for the fiscal year that ends this month — the first time since the Japanese automaker went public in the 1950s that it’s posted an annual loss.
Honda pointed to a myriad of factors for the bad year, including U.S. tariffs, but the main culprit has been its pullback from EV production.
With weak demand in North America and stiff competition in China, the automaker cancelled plans to roll out three new EVs. That retreat has come with a US$15.7 billion price tag.
Why it matters: Honda was one of the more aggressive automakers in its pursuit of electric models, but the entire industry is feeling the pain of being too early on EVs. Automakers are expected to take a US$65 billion hit from having to shift their EV strategy.
Stellantis and Ford have each taken US$26 billion and US$19.5 billion losses, respectively, after being forced to cancel new electric models.
Zoom out: The pullback from EVs has had an outsized impact in Canada. Honda paused construction of its $15 billion EV plant in Ontario for at least two years; Stellantis moved EV Jeep production to Illinois; and GM stopped making the BrightDrop electric van at its Ontario plant, Canada’s first all-EV manufacturing facility.—LA