Honda admits net loss of up to 690 billion yen in 2025 and re-evaluates EV strategy

Honda projects a net loss of up to 690 billion yen in 2025 and revises EV plans, with salary cuts and adjustments to investment targets.

Financial and Strategic Summary

Honda Motor Co. announced this Thursday that it expects to record a net loss between 420 billion and 690 billion yen in the 2025 fiscal year, as it halts the development of some electric vehicle models intended for production in North America.

As part of the adjustments, the CEO and Vice President will have a 30% cut in monthly salaries for three months in the 2026 fiscal year.

Previously, the company had forecast a net profit of 300 billion yen for the year ending this month.

EV Strategy Context

Since 2021, Honda signaled the transition to EVs or fuel cell vehicles (FCVs) by 2040 as the axis for decarbonization. However, the momentum has slowed, with stagnant growth in the global EV market.

In May of last year, the manufacturer announced it would reduce its EV investment for the period up to 2030 from 10 trillion to 7 trillion yen, citing pressures from ultra-sus tariffs and weak demand. At the same time, the 2030 EV share target dropped from 30% to about 20%, while maintaining the goal of a full transition to EVs and FCVs by 2040.

Operational Results

Also this Thursday, Honda indicated a forecasted operating loss between 270 billion and 570 billion yen for the 2025 fiscal year, compared to the previous forecast of operating profit of 550 billion.

Summary of Key Numbers:

• Forecasted net loss: 420 to 690 billion yen (Fiscal 2025)
• Forecasted operating loss: 270 to 570 billion yen
• Salary cuts for CEO/VP: 30% for 3 months (Fiscal 2026)
• Revised EV investment for 2030: 7 trillion yen (from 10 trillion)
• 2030 EV sales target: ~20%
• 2040 Target: full transition to EVs and FCVs

The content portrays the evolution of a corporate strategy in the face of global demand and tariffs, focusing on decarbonization and EVs.

Question for readers

What is your reading of Honda's path? Will the company manage to realign its EV strategy by 2040 or will there be a need for additional short-term changes?

If you liked the analysis, leave your comment below with your opinion on the future of EVs and what this means for the automotive industry.