Honda to Book ¥1.3 Trillion Charge, Forecasts ¥270–570bn FY26 Operating Loss
Honda cut its FY3/26 outlook to an operating loss of ¥270–570 billion and a net loss of ¥420–690 billion, reversing prior forecasts of a ¥550 billion operating profit and ¥300 billion net profit. The automaker will book ¥1.3 trillion of EV-related charges this fiscal year after canceling U.S. EV programs.
1. Earnings Guidance Revision
Honda revised its FY3/26 outlook to an operating loss of ¥270–570 billion, down from a prior forecast of a ¥550 billion operating profit, and cut net income guidance to a loss of ¥420–690 billion versus an expected ¥300 billion profit, reflecting a strategic EV reset.
2. EV Charge Breakdown
The company will incur ¥820–1.12 trillion in additional operating expenses and ¥110–150 billion in equity-method losses tied to the cancellation of U.S. EV programs—including the Honda 0 Series and Acura RSX—with ¥1.3 trillion booked this fiscal year and ¥1.2 trillion next.
3. Market Dynamics Prompting Reset
Honda’s shift follows slowing U.S. EV demand, policy changes impacting internal-combustion and hybrid economics, and intensifying competition from Chinese EV makers equipped with advanced software and ADAS capabilities, leading to the cancellation of three planned U.S. electric models.
4. Hybrid Focus and Dividend Support
To support mid-term recovery, Honda will maintain its dividend and prioritize hybrid expansion to rebuild four-wheel profitability in Japan, the U.S. and India while pursuing lower fixed costs through its HEV strategy.