Honda reports first annual loss in nearly 70 years due to EV costs
Honolulu Star-Advertiser • • business
Key Points:
- Honda Motor reported its first annual loss in nearly 70 years, posting a 414.3 billion yen ($2.63 billion) operating loss due to more than $9 billion in restructuring costs for its electric vehicle (EV) business.
- The company scrapped its long-term EV sales targets, including the goal of EVs making up 20% of new car sales by 2030 and a full shift to electric or fuel-cell vehicles by 2040.
- Honda indefinitely suspended its $11 billion Canada EV project, which would have been its largest investment in the country, reflecting challenges in its EV strategy amid weaker-than-expected demand.
- Despite losses in its auto segment, Honda's profitable motorcycle business, particularly strong sales in India and Brazil, helped cushion the financial impact and supported a pledge of at least 800 billion yen in shareholder returns over three years.
- The company anticipates returning to profitability this fiscal year with a forecasted 500 billion yen profit, but faces margin pressures from rising material costs and the EV transition in key motorcycle markets like India and Vietnam.