Honda Reports First Loss in Nearly 70 Years, EVs Blamed
Japanese automaker Honda Motor has reported its first annual operating loss in nearly 70 years.
The significant burden from its electric vehicle (EV) business, competition with Chinese automakers, and the impact of US tariffs have put pressure on the company’s performance.
Citing CNBC, on Friday (15 May 2026), Honda booked an operating loss of 414.3 billion yen or 2.61 billion US dollars, equivalent to approximately IDR 45.92 trillion (assuming an exchange rate of IDR 17,595 per US dollar) for the fiscal year ending March 2026.
This performance was influenced by provisions for its troubled EV business and related investments, competitive pressure from Chinese rivals, and the impact of US tariffs of 346.9 billion yen.
“The business environment surrounding the company is changing rapidly, and the outlook remains uncertain,” Honda wrote in its financial report released on Thursday (14 May 2026).
As part of its efforts to restructure its electric vehicle business, Honda said it would cancel the launch and development of several EV models previously planned for production in North America.
Honda also highlighted the increasing competition in the Chinese market due to the emergence of new electric vehicle manufacturers.
“In this challenging and competitive environment, the company is also revising product launch plans for certain EV models,” said Honda.
Despite posting a large loss, Honda’s shares actually jumped more than 7 percent on Friday. The company’s shares last traded up 7.42 percent to 1,418 yen.
“We believe the positive share price reaction was driven by the company’s operating profit and net profit guidance, both of which are about 38 percent above consensus estimates,” said Akita.
However, Akita believes that it is not yet certain whether these projections have fully taken into account potential losses related to EV investments.
Honda is said to be facing major challenges due to its late entry into the electric vehicle market.
Also read: Astra’s Strategy to Maintain Market Share Amidst the Onslaught of Chinese and Korean EVs