Honda Cuts Electric Vehicle Plans, Warns Losses Could Reach $8.6 Billion

Investing.com – Honda announced on Thursday that it will cancel the release and development of three electric vehicle models originally planned for North America and revise its electrification strategy, which is expected to lead to additional operating costs and equity method losses.

The Japanese automaker stated that losses related to the electric vehicle cancellations are projected to reach 930 billion to 1.27 trillion yen in fiscal year 2026, with a maximum of 1.2 trillion yen in fiscal year 2027. The company also indicated that cash outflows in the next fiscal year could be as high as 1.7 trillion yen.

For fiscal year 2026, Honda added an extra 820 billion to 1.12 trillion yen in operating expenses to its previous plan, along with 110 billion to 150 billion yen in equity method losses. Management explained at the briefing that the range of losses this year reflects the fact that payments to suppliers have not yet been finalized.

Despite the expected losses, Honda plans to maintain a dividend of 70 yen per share.

The company also outlined new initiatives as part of its revised strategy, including expanding its lineup of mid-sized hybrid electric vehicles and launching large hybrid electric vehicles in the late 2020s.

For fiscal year 2027, the previously discussed baseline operating profit was 1.05 trillion yen. If the maximum potential loss of 1.2 trillion yen occurs, the company will record a loss for that fiscal year.

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