Honda Admits Missteps on EV Push as Losses Hit $1.71 Billion, Shifts Focus Toward Hybrids

Honda is facing a difficult stretch. The Japanese automaker has now reported operating losses for four consecutive quarters and is acknowledging that its heavy investment in electric vehicles has proven more expensive than expected. Costly miscalculations have led to major write-downs and a rapid reassessment of its global strategy.

For the nine months ending December 31, Honda reported ¥267.1 billion (about $1.71 billion) in write-downs and additional expenses tied to its EV transition. A significant portion of that impact was recorded in December alone.

Key figures include:

• Operating losses for four straight quarters

• Losses of ¥166.4 billion (roughly $1.07 billion) over the first three quarters of the fiscal year

• ¥267.1 billion ($1.71 billion) in EV-related write-downs and transition costs over nine months

At the same time, Honda has delayed several upcoming EV projects. Industry outlet Auto Newspaper suggests total annual losses related to the company’s EV business could reach as much as ¥700 billion, or approximately $4.48 billion. Even if that estimate proves high, the trend is clear: EV investments have yet to generate the expected returns, while the costs have already been incurred.

Executive Vice President Noriya Kaihara acknowledged that Honda needs a “fundamental review of its strategies” to regain competitiveness. The language signals that minor adjustments won’t be enough.

Another major development involves Honda’s relationship with General Motors. The company is stepping back from its close EV partnership with GM after weaker-than-expected sales of the Acura ZDX and Honda Prologue, both built on GM’s Ultium platform. Honda has reduced the number of vehicles it purchases from GM and has paid compensation to the Detroit automaker, adding further financial strain.

As recently as 2024, Honda had projected annual EV sales of up to 2 million units by 2030. Now, the company is effectively conceding that it overestimated how quickly global markets would adopt fully electric vehicles. Executives also point to shifts in the U.S. political and regulatory environment over the past year as a contributing factor. According to Kaihara, Honda will unveil a revised EV roadmap later this year.

Despite the setbacks, several EV models remain on schedule:

• The electric Acura RSX is expected to launch by the end of this year

• The Honda 0 Series SUV is also slated for release before year’s end

The centerpiece of Honda’s restructuring will be a renewed emphasis on hybrids. Rather than prioritizing EVs above all else, the company now plans to lean more heavily into hybrid technology, which it sees as better aligned with current consumer demand.

Honda’s updated hybrid goals include:

• Doubling hybrid sales

• Increasing total hybrid volume to 2.2 million units

In short, Honda is pivoting away from bold EV promises toward what it views as a more balanced and pragmatic approach—scaling back high-risk electric investments while doubling down on hybrids that offer a more predictable path in today’s market.