Honda reported its first annual operating loss in nearly 70 years as a listed company for the fiscal year ended March 31, 2026. The automaker booked a 414.3 billion yen ($3.3 billion SGD) operating loss, largely due to electric vehicle (EV) related losses exceeding $9 billion (1.45 trillion yen) during the period [1, 2].
The company attributed the losses to its EV business, which struggled amid challenging market conditions and soaring costs. Honda also revealed plans to incur an additional 500 billion yen in EV-related costs in the fiscal year beginning April 2026 [1]. Despite the setbacks, Honda forecast a return to profitability in the current fiscal year, projecting a 500 billion yen profit [1].
Honda’s challenges extended to the US market, where the company canceled several EV models, including three planned for production in Ohio and two developed through a joint venture with Sony. This followed a sharp 28% decline in US EV sales in the first quarter of 2026, pressuring Honda’s strategy [2].
At a May 13-14 press conference in Tokyo, CEO Toshihiro Mibe announced a significant strategic shift away from pure electric vehicles. He said Honda will place greater emphasis on hybrid vehicles that use fewer expensive battery materials and can be brought to market sooner [2]. Mibe said, "Honda will reallocate more development and production resources into hybrid models to accelerate the market launch ahead of the original schedule and increase the number of compelling products. We have made steady progress in the development of hybrid vehicle technologies, where Honda has strengths, based on our belief that hybrid models will continue to be the key to addressing environmental challenges." [2]
Honda’s shift marks a major course correction after years of EV investment, aiming to balance environmental goals with financial sustainability.
The company plans to continue restructuring its EV business in 2026, absorbing further costs while ramping up hybrid production.
Honda’s financial results for the year ending March 2026 and its updated EV strategy were disclosed as part of its full-year earnings announcement and follow-up briefing in May.
