Honda’s push into electric vehicles is proving costly, with the automaker reporting billions in losses tied to scaling back and revising its EV strategy. The Japanese manufacturer confirmed that its electric vehicle investments have resulted in significant write-offs, prompting a broader review of its long-term electrification plans.
For the nine months ending December 31, Honda’s EV operations contributed to losses of approximately $1.71 billion. The company expects that figure to reach $1.86 billion for the full fiscal year ending in March. Overall, Honda reported an operating loss of $1.07 billion over the first three quarters and projects EV-related losses could climb to $4.48 billion by the end of the fiscal year.
The financial strain comes as Honda adjusts to weaker-than-expected EV demand. Global EV sales dropped to 15,000 units in the final quarter of 2025. In the United States, sales of the Honda Prologue fell sharply, declining 86 percent by the end of 2025. To stimulate demand, the company is relying more heavily on incentives and fleet sales, areas where Honda has traditionally been more cautious than some competitors.
Honda is not alone in facing the financial consequences of aggressive EV investments. General Motors has taken write-downs of approximately $7.6 billion, Ford has recorded $19.5 billion in charges related to restructuring its EV business, and Stellantis has written down about $26 billion after pulling back on its electric vehicle plans. The broader industry is grappling with slower consumer adoption and high development costs.
The automaker’s collaboration with General Motors on the Honda Prologue and Acura ZDX is also winding down. Both vehicles were jointly developed and assembled by GM, but Honda will now source fewer Prologues and has discontinued the Acura ZDX after just one model year. As a result, Honda will owe GM compensation related to the reduced production volume.
Looking ahead, Honda plans to shift its emphasis toward hybrid vehicles. Beginning in the next fiscal year on April 1, the company will roll out a revised product strategy that prioritizes new hybrid powertrains. Honda aims to double global hybrid sales to 2.2 million vehicles annually by 2030, signaling a recalibration toward electrification strategies that blend internal combustion and electric power rather than focusing exclusively on fully electric models.
