Famous Car Brands Suffer Losses as They Push for Electric Vehicles
Honda has reported its first annual loss since 1955 after policy changes in the US impacted the electric vehicle industry, forcing the company to write down significant investments.
According to CNN International, the Japanese automaker reported a loss of 1.6 trillion yen (Rp177.5 trillion) in the fiscal year ending March 2026.
Previously, Honda was expected to still be able to generate a profit of US$7.4 billion, or approximately Rp129.5 trillion. As a result, Honda booked a net loss of 403.3 billion yen (Rp44.7 trillion).
The losses were triggered by major changes in automotive policy in the United States during the Trump administration. The US government revoked strict emission rules and eliminated a US$7,500 (Rp131.25 million) tax incentive for EV buyers.
The loss of subsidies caused EV sales in the US to plummet since September. Meanwhile, rising gasoline prices also failed to boost public interest in buying electric cars.
Previously, many global automakers invested heavily to accelerate the transition to fully electric vehicles over the next decade. This strategy was adopted due to expectations of stricter US emission rules during the Biden administration.
However, the Trump administration reversed these regulations and eliminated the threat of large penalties for automakers that violated emission standards.
The policy change led automakers to refocus on selling gasoline-powered SUVs and trucks, which have long been their largest source of profit. However, this also forced companies to adjust the value of their EV investments, which totaled billions of dollars.
Honda admits that it may still record additional write-downs of EV investments in the current fiscal year, although the company expects the impact will not cause annual losses to occur again.
The wave of losses resulting from the adjustment of EV strategies has also been experienced by a number of other major automakers. General Motors reported a loss of US$7.2 billion (approximately Rp126 trillion) in 2025 due to the aggressive reduction of its electric vehicle business.
Meanwhile, Ford recorded losses of up to US$17.4 billion (approximately Rp304.5 trillion) and warned of potential additional costs this year. At the same time, Stellantis, which includes the Jeep, Ram, Dodge, and Chrysler brands, booked losses of 25.4 billion euros (equivalent to Rp521.97 trillion).
However, global automakers have not completely abandoned electric vehicles. They still face stricter emission rules in Europe and Asia, including in several US states such as California, which aims to ban the sale of new gasoline cars starting in 2035.