Honda Cancels Electric Vehicle Project, Incurs 265 Trillion Rupiah Loss
Jakarta — Honda Motor Co., Ltd. has announced significant changes to its global electrification strategy. The Japanese automotive manufacturer has decided to cancel the development and launch of three electric vehicle (EV) models originally scheduled for production in North America.
According to Global.honda on 13 March 2026, the company made this decision following a comprehensive review of its electrification strategy amid changing global business conditions.
Following this decision, Honda also expects to record losses in its consolidated financial report for the fiscal year ending March 2026.
Despite US government policies promoting the acceleration of the transition to electric vehicles, Honda had previously shifted its strategy towards popularising EVs, particularly for small mobility vehicles such as passenger cars.
In recent years, Honda has relied on stable revenue from petrol and hybrid vehicles to support EV development. The hybrid technology base developed over many years, combined with its motorcycle business and financial services with a strong customer base, became the main pillars of this strategy.
However, Honda’s automotive business now faces significant pressure. Profitability has declined owing in part to changes in US tariff policies that have impacted petrol and hybrid vehicles. Additionally, the substantial allocation of resources towards EV development has reduced Honda’s competitiveness in Asian markets.
Meanwhile, in China, consumer preferences for vehicles have shifted. Whereas previously consumers emphasised hardware aspects such as fuel efficiency and cabin space, they now increasingly value software-based features that can evolve according to user needs.
This shift has triggered intensifying competition, particularly from new EV manufacturers with faster product development cycles and advantages in software-defined vehicle (SDV) technology, including advanced driver assistance systems (ADAS).
Facing this competitive environment, Honda acknowledges it cannot yet deliver products with competitive value compared to new EV manufacturers. This situation has further pressured the company’s competitiveness in several major markets.
To improve its financial condition, Honda has ultimately decided to halt the development of the three EV models originally planned for North American production: the Honda 0 SUV, Honda 0 Saloon, and Acura RSX.
According to the company, commencing production and sales of these three models amid slowing EV demand would risk incurring even greater losses in the long term.