Honda recorded its first-ever full-year loss of 423.9 billion yen, driven largely by an estimated 2.5 trillion yen spent on EV development over the past and current fiscal years. The automaker scaled back several planned EV models, including a joint venture project with Sony, as costs surged beyond initial projections.

Rollbacks of U.S. environmental regulations and cuts to EV incentives under the Trump administration, along with tariffs on imported autos and parts—albeit reduced to 15%—contributed to weakening EV demand and inflated production expenses for Honda’s global operations.

Overall vehicle shipments fell from 3.7 million to 3.4 million units, while motorcycle deliveries climbed from 20 million to 22.1 million units, boosting total sales revenue 0.5% to 21.8 trillion yen. The motorcycle segment’s resilience helped partially offset losses in the auto division.

Honda projects a return to a 260 billion yen profit in fiscal 2027 and plans to balance its EV push with hybrids and traditional gasoline models. CEO Toshihiro Mibe emphasized ongoing R&D into EV batteries and a broader carbon neutrality roadmap to restore growth.