Honda added to a chorus of global automakers warning of the costly fallout from slowing demand for electric vehicles, as well as persistent pressures from US President Donald Trump’s tariffs.
The Japanese carmaker said one-time EV-related expenses, including losses and impairments on vehicles sold in the US and write-offs of development assets, cost it ¥267.1 billion (R27 billion) in the nine months ended 31 December.
On top of that, it saw a ¥279.5 billion (around R29 billion) hit from US import duties.
The carmaker faces a litany of challenges that “make it necessary to fundamentally reassess our strategy and rebuild our competitiveness,” it said Tuesday.
Headwinds include slowing EV growth, protectionist trade policies, heightened supply chain risks and intensifying global competition, it said.
Major automakers are warning of an EV winter as major markets like the US roll back supportive policies, leaving the industry struggling to pivot their lineups to gas-electric hybrid models that are increasingly popular with consumers.
Stellantis this month said it’s taking more than €22 billion (around R414 billion) in charges mainly linked to reversing course in its EV strategy, and Ford has announced $19.5 billion (around R310 billion) in charges from its overhaul.
While Honda’s charge is much more modest, it underscores the costly recalibration underway for automakers that had poured billions of dollars into an EV transition that’s starting to falter.
“The electrification we imagined has not materialised,” Honda’s Executive Vice President Noriya Kaihara told reporters. “We need to reassess the timing for rolling out EVs in North America.”
Beyond EV demand, Honda also warned of emerging supply chain risks related to rare earths and memory components.
The company said it has established a path to prevent the recurrence of a chip supply shortage that saw it halt some production late last year.
Still, surging demand for Honda’s motorcycles is offsetting its struggling car business. In the first nine months of the fiscal year, it sold a record 16.4 million motorbikes and reported an operating profit of ¥546.5 billion (around R57 billion).
That compares with a ¥166.4 billion (around R17 billion) operating loss in its automobile business.
For the third quarter, operating income was ¥153.4 billion (around R16 billion), beating analyst estimates. It maintained its full-year operating profit outlook at ¥550 billion (R57 billion), which is down from ¥1.21 trillion (R126 billion) last fiscal year.
The company raised its net sales forecast to ¥21.1 trillion (around R2.2 trillion). It also announced that it will cancel 747 million, or about 14%, of its own shares.
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