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Posted on 08/07/2025 3:00:06 PM PDT by george76
he Japanese automaker posted a nearly $1.6 billion operating profit loss, as it writes off losses from its EV efforts and tariffs. The ‘Power of Dreams’ brand is taking a massive loss Japanese automotive giant Honda is rethinking its strategy regarding electric vehicles as it absorbed red-ink losses stemming from their development and the impact of U.S. tariffs.
In the first quarter of its 2025-2026 fiscal year (April 1 to June 30, 2025), Honda took a one-time charge of ¥113.4 billion (~$780 million) related to its EV-related troubles. In total, the impact of the EV charge and its exposure to tariffs took a toll on Honda’s operating profit during the quarter, as earnings fell to ¥244.1 billion (~$1.69 billion) from ¥484.7 billion (~$3.35 billion) just one year ago.
During a press conference on August 6, Tokyo time, Honda Managing Executive Officer Eiji Fujimura attributed the nearly $780 million charge regarding EVs to its mistakes, adding that they aren’t “optimistic” about the future of electric vehicles.
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Honda is struggling to sell EVs profitably Although Honda still plans to launch its 0 Series line of EVs in the U.S. in 2026, the company has delayed product development and investment in a Canadian EV production hub. However, it struggles to come to terms with the loss of the U.S. federal tax credit incentive and the cooling growth in EV demand. Currently, Honda sells two EVs in the States, the GM Ultium-based Honda Prologue and Acura ZDX crossovers, which have had healthy sales numbers. Through June, American Honda moved 16,317 Prologues, while Acura sold 10,335 ZDX; numbers that were only possible with heavy incentives.
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Honda spent an average of more than $12,000 on each Prologue and $21,000 on each ZDX it moved during the April-June quarter.
In addition, Honda’s attempts to break into the mecha-competitive Chinese EV market with its line of locally developed EVs have not been a fruitful experiment for the automaker. In remarks, Fujimura noted that Honda’s Chinese-market EVs were too expensive amidst a sea of local brands competing in local price wars, and that their cars lacked important connected car technology features that Chinese consumers found on less costly models.
“We are struggling with EVs there,” he said. “We are underachieving against the initial plan.”
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one thing to note is that Honda remains exposed to potential trade issues with Mexico and Canada, as a formal agreement with the respective countries has not been finalized. For the full fiscal year to March 31, 2026, Honda estimates it will incur ¥190 billion ($1.31 billion) in tariff costs on complete vehicles imported to the U.S., with the most significant chunk coming from the USMCA nations.
Honda sources a third of its vehicles from tariff-targeted Mexico and Canada, including popular models such as the compact HR-V crossover, the Acura ZDX, and Honda Prologue EVs from GM’s Ramos Arizpe plant, as well as select units of the Civic and CR-V from Alliston, Ontario.
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It would be good to investigate how much of the push by auto manufacturers to make EVs was due to pressure from the government. They all had to see that there was no real profit in it absent government subsidies.
The Japanese probably didn’t see it coming as well as the others.
Honda seems to have other issues. They were at one time bulletproof cars (except for the interference engine/timing belt issues, which was always really a maintenance issue.). They are now having a lot more problems.
I agree 100%. And more than just govt subsidies for EV's. The Dims were openly stating that they are at war with gas cars. With the Biden CAFE standards all but saying that they want gas cars to be impossible to make by 2030, you've got to cut the auto manufacturers some slack for trying something else.
“the Honda Prologue is essentially a rebadged Chevrolet Blazer EV” ... they even told me that at the honda dealership when i bought my 2024 honda accord hybrid ... they rolled their eyes when they told me that, and it was obvious the dealership didn’t think very much about EVs in general or the fake honda EV in particular ...
Forcing people to have EVs from the government on down was a case of the tail walking the dog.
It never works.
Governments , “build the EV crap and we’ll make the stupid citizens buy them , free money” LOL
The tail WAGGING the dog. Sorry.
“Fujimura hinted that the automaker may expand its two-shift operation at U.S. plants to three to keep up with demand, requiring more coordination with suppliers.”
IOW, YUGE demand for honda ice and hybrid civics and accords in the states, but honda corporate was too focused on losing two billion dollars trying to crack the doomed and collapsing EV markets ...
How much was covered by USAID?
Not even sure where to go to nowadays. If you can’t trust Honda and Toyota anymore who can you trust? Better off buying a cheapy and hope for the best. Throw away culture strikes again.
My 2024 Honda HRV was made in Mexico. I appreciate it doesn’t have a bunch of efficiency crap on it like a turbo or auto stop/start, but build quality is definitely not on par with the Honda of as recent as 2021. Tried to buy a 2021 HRV but the wife didn’t want it.
They need to make their very excellent lawnmowers again.
Best walk behind consumer grade lawnmowers on the planet.
Just say NO to electric vehicles.
I have one that’s on it’s 11th season maintaining a 10,000 sq. ft. lawn. I stay on top of the maintenance so it lasts a long time, especially now that it can’t be replaced. Maybe I should buy a spare engine and tuck it away.
Without subsidy the EV market is doomed.
They stopped making small gasoline motor devices like electric generators and the beloved Honda lawn mowers. Expect continued huge losses when the EV mowers don’t sell.
>> trying to crack the doomed and collapsing EV markets ...
I am LMAO-enjoying the suffering of automakers who foolishly went all-in on EVs.
And the total utter collapse of Faguar is months, maybe weeks, away. Ta-ta, Faguar!
>> and the beloved Honda lawn mowers
I have a pressure washer with a Honda engine that I bought in 2006. Hardly ever use it but whenever I do, even after twenty years (and lackadaisical maintenance, LOL) it still starts on the second pull.
>> Better off buying a cheapy and hope for the best. Throw away culture strikes again.
How long before Harbor Fright starts selling cheapy cars and trucks?
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