While its losses from electric vehicles (EVs) aren’t as large as those posted by Ford (A$11.5 billion) and Stellantis (A$35 billion) recently, the car division of Honda remains in the red, prompting the Japanese automaker to change strategy.
For the nine months to December 2025, Honda’s automotive division posted an operating loss of ¥166.4 billion (A$1.5bn), which includes a charge of ¥267.1 billion (A$2.5bn) related to tariffs in the US and one-time EV-related expenses.
According to Automotive News, Honda’s automotive division has recorded four consecutive quarters of losses. Thanks to strong results from the motorcycle arm and financial services department, Honda overall is still in the black with a ¥591.5 billion (A$5.4bn) profit.
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When asked how the company will respond to continuing automotive losses, Noriya Kaihara, an executive vice president at Honda, told media: “While our ultimate goal [of carbon neutrality by 2050] remains unchanged, the pathway to achieving it is evolving into a different form from what we had previously envisioned”.
Kaihara-san said Honda “will carefully reassess the timing of EV introductions” by “taking into account regional market conditions”.
Since the US$7500 (A$10,500) federal EV tax rebate ended in the September 2025, electric car sales in the US have slumped and the automaker doesn’t see it rebounding in the near term. Accordingly, Honda “will concentrate our resources on ICE and HEV models” instead.
GM currently produces the Prologue for Honda, and the Japanese automaker has set aside ¥20 billion (A$180m) to compensate the General for lower than expected orders and sales.
Honda acknowledges this pot of money “may prove insufficient”. While the Prologue remains in showrooms and is accompanied by cash incentives, Acura has axed its GM-supplied ZDX due to slow sales.
As for China, where EV uptake is much higher, Kaihara-san admits the company is “lagging behind local manufacturers in areas such as software and interior technologies”. As such, it will move away from the current “self-reliant approach [to] shift toward a strategy that is more deeply rooted in the Chinese market”, and lean more on “local suppliers”.
Unlike Toyota, Nissan and Mazda, Honda has so far resisted using EV architecture and technologies borrowed from its local joint-venture partners.
It’s unclear if Honda will change tack here, but Kaihara-san says there will be an intense focus on cost. He says the “know-how gained in China” will be spread to other markets across Asia.