Honda expects up to 690 billion yen in net loss for FY2025

The automaker revised down its estimate from a net profit of 300 billion yen, reflecting impairment and other losses linked to the cancellation of its development and sale of electric vehicle models that had been planned for production in North America, because the market situation there deteriorated rapidly.

It would be the first time for Honda to incur a group net loss since the company began disclosing consolidated earnings in 1977.

Honda expects to log further losses in fiscal 2026 and later, possibly raising its total EV-related losses, including those for the current year, to up to 2.5 trillion yen.

Honda also said that President Toshihiro Mibe and its executive vice president will voluntarily return 30 per cent of their monthly compensation for three months to take responsibility for the red ink.

"There has been a change in the business environment far greater than what we expected," Mibe told an online press conference. "We will face the reality head-on."

Honda plans to review its strategy for its four-wheel vehicle business and strengthen the development and sales of hybrid vehicles, which are gaining popularity in North America.

In the current year, the company expects to book between 820 billion and 1,120 billion yen in additional expenses, as well as 110 billion to 150 billion yen in investment losses, due to the review of its EV strategy in North America.

Honda now projects a consolidated operating loss of 270 billion to 570 billion yen, down from the previous estimate of a 550-billion-yen profit. It kept its sales forecast unchanged.

Demand for EVs is falling in North America, causing US automakers to incur massive losses, after the US President Donald Trump's administration abolished a tax incentive introduced under the EV promotion policy of his predecessor, Joe Biden.

[Copyright The Jiji Press, Ltd.]