August M
Honda has reported its first annual loss since 1955 after the global auto industry sharply scaled back electric vehicle investments.
The Japanese carmaker said billions of dollars tied to its EV strategy were wiped from its balance sheet as weaker demand and policy changes in the United States forced manufacturers to rethink expansion plans, reports CNN.
EV slowdown
CNN reported that automakers had invested heavily in electric vehicles while expecting stricter US emissions rules and stronger government incentives.
That strategy changed after the Trump administration rolled back emissions standards and ended a $7,500 federal tax credit for EV buyers.
According to CNN, EV sales dropped significantly after the incentive expired, while higher gasoline prices failed to trigger a major shift toward electric cars among American consumers.
Heavy losses
Honda said it recorded a 1.6 trillion yen hit, equivalent to nearly $10 billion, during the fiscal year ending in March.
Without the writedown, the company would have reported a multibillion-dollar profit, but instead posted a net loss of 403.3 billion yen, or about $2.6 billion.
The company also warned additional charges linked to EV investments are expected this year, although Honda said they are unlikely to result in another annual loss.
Industry-wide pressure
Honda is not alone in retreating from earlier electric vehicle ambitions.
General Motors previously disclosed a $7.2 billion charge connected to its EV pullback, while Ford reported a $17.4 billion hit and Stellantis announced losses tied to a 25.4 billion euro writedown.
According to CNN, Ford and Stellantis both ended 2025 with net losses partly linked to scaling back electric vehicle programmes.
Gas vehicles return
Automakers have increasingly shifted attention back to gasoline-powered SUVs and pickup trucks, which continue generating stronger profits.
However, companies are still maintaining some EV investment because of stricter emissions rules in Europe and Asia, along with regulations in states such as California.
Manufacturers also remain wary of growing competition from Chinese automakers, many of which focus heavily on electric vehicles.
Sources: CNN, Honda, General Motors, Ford, Stellantis
