Honda Motor said on Thursday it has downgraded its earnings projection for the financial year that ends this month, forecasting a loss between 420 billion yen and 690 billion yen - equivalent to about $2.6 billion to $4.3 billion using the exchange rate it provided. The revision follows an internal reassessment of the company's approach to electric vehicles.
Previously, Honda had anticipated a profit of 300 billion yen for the fiscal year now concluding. The updated outlook reflects the decision to cancel development and market launches of certain electric models that were to be produced in the United States.
Honda attributed the cancellation of some U.S.-made EV projects to a "slowdown of the EV market in North America," and said the strategic shift will result in substantial costs. Management set an upper estimate of 2.5 trillion yen in expenses and losses that could be incurred over multiple financial years as the company adjusts its electrification plans.
The automaker said it will hold a press conference at 07:30 GMT to discuss the revisions. The company also supplied the dollar-yen conversion rate used in its announcement: $1 equals 159.0400 yen.
Context and scale
The change in outlook moves Honda from a previously stated profit position into a multi-hundred-billion-yen loss for the fiscal year ending this month. Management has signalled the adjustment reflects both strategic recalibration of its EV roadmap and a response to weaker-than-expected demand conditions in North America for electric vehicles.
Honda warned that the financial consequences of the shift are not confined to a single year, instead spanning multiple fiscal periods with potential charges and losses up to the 2.5 trillion yen figure cited.
What the company will address next
- Honda will elaborate on the reassessment and its financial implications at a scheduled press conference at 07:30 GMT.
- The company has cancelled some U.S.-produced EV developments and launches as part of the strategic pause.
- Management quantified expected multi-year expenses and losses up to 2.5 trillion yen related to the strategy change.
All figures cited above were provided by the company in its announcement.