Honda forecasts a $4.3 billion loss in 2026, slashing EV plans due to weak demand, tariffs, and policy changes.

Honda expects a net loss of 420 billion to 690 billion yen ($4.3 billion) for the fiscal year ending March 2026, reversing a prior profit forecast, due to a major strategic shift in its electric vehicle plans. The company is canceling development and launches of several North American EV models, citing weakened demand, new U.S. import tariffs, elimination of federal EV tax incentives, and relaxed fossil fuel regulations. These changes led to impairment and write-off losses on EV-related assets and potential write-downs on investments in China. Honda is reducing its EV investment through 2030 to 7 trillion yen from 10 trillion and lowering its 2030 EV sales target to around 20% from 30%, though it maintains its long-term goal of transitioning to EVs and fuel cell vehicles by 2040. The CEO and executive vice president will forgo 30% of their pay for three months, and Honda plans to import U.S.-made vehicles for sale in Japan.