Honda is dropping three electric models once planned for North America and says the damage could be as high as 2.5 trillion yen, or about US$15.7 billion (RM62bil).
The three models are the Honda 0 SUV, Honda 0 Saloon and Acura RSX. Honda said it went back over its EV plans after conditions worsened in the United States and China.
EV demand is not as strong as it had hoped. Incentives are less predictable. In China, local rivals are setting a pace Honda is struggling to match.
Honda now expects heavy write-offs and other cancellation costs in the financial year ending March 2026.
The hit is severe. Honda still expects revenue of 21.1 trillion yen, but instead of the 550 billion yen operating profit it had forecast earlier, it now sees an operating loss of 270 billion to 570 billion yen. It also expects losses from its China operations.
Reuters reported that the size of the writedown suggests Honda stuck with these projects longer than it should have, even as conditions worsened and production got closer. Reuters also said cash outflows could reach 1.7 trillion yen, with much of that tied to supplier compensation.
Honda said newer Chinese EV makers are developing cars faster and are ahead in software-defined vehicles and driver-assist technology. Reuters reported Honda sold only about 17,000 EVs in China last year, or roughly 2.5% of its sales there.
For a company of Honda’s size, that is a weak showing in the market now setting the pace for EVs.
