Honda disclosed that scrapping three planned North‑American electric models will push its earnings into a loss of up to ¥2.5 trillion ($15.7 bn) over the next two years. The company now projects a full‑year net deficit of ¥360 bn to ¥630 bn, reversing a prior ¥360 bn profit outlook. It marks the first annual loss since Honda went public in the 1950s.

The reversal reflects a misread of the U.S. EV market, where demand now appears less than half of Honda’s expectations. Tariff pressures and the Trump administration’s rollback of subsidies have dampened sales, while Chinese rivals outpace Honda in speed, product development and software. Impairments on its China operations further erode competitiveness, adding to a global industry‑wide $65 bn hit from EV retrenchments.

To signal accountability, President Toshihiro Mibe will forfeit 30 % of his monthly salary for three months, and senior auto executives will return 20 % of their pay. Honda will pivot toward additional hybrid launches in the United States while the fate of its Sony‑co‑developed EV remains under review. The loss underscores the financial risk of aggressive EV rollouts in a volatile market.