Honda posted a $2.7 billion loss as the automaker grapples with electric-vehicle whiplash in its biggest market. The Japanese company, the fifth-largest automaker in the U.S. by sales, is confronting some of the steepest challenges in its nearly seven decades as a public company. U.S. tariffs have squeezed profits, Chinese upstarts pose a new threat, and above all, its North American EV ambitions have collapsed.

The loss marks a stunning reversal for a company that managed to stay profitable through a global financial meltdown, natural disasters, a safety crisis and the pandemic. Honda expects up to a $15.7 billion hit from its EV strategy reassessment. The company and Sony already hit the brakes on a $102,900 luxury EV project, signaling how far behind the automaker has fallen in the EV race.

Legacy automakers across the industry have struggled to navigate the North American EV market as consumer adoption slowed and competition from Chinese manufacturers intensified. Honda now faces a difficult climb to regain momentum in the electric vehicle segment while defending its traditional business from new rivals.