Honda Announces Losses Associated with Reassessment of Automobile Electrification Strategy; Revision to Forecast for Consolidated Financial Results; and Future Direction
In order to improve the current earnings situation as early as possible, Honda considered various options; however, after careful consideration, the company made the decision to cancel the development and market launch of three EV models that had been planned for production in the U.S., namely the Honda 0 SUV, Honda 0 Saloon, and Acura RSX. Honda determined that starting production and sales of these three models in current business environment where the demand for EVs is declining significantly would likely result in further losses over the long term.
Based on this decision, Honda now expects to record 1) write-off and impairment losses on tangible and intangible assets that were intended to be used for the production of these three EV models, as well as 2) losses related to additional expenses resulting from the cancellation of the development and sales of these models.
In addition, in consideration of the intensification of competition in China, Honda reassessed the recoverability of investments accounted for using the equity method in China, and now expects to incur an impairment loss on the investments accounted for using the equity method.
As a result, in the consolidated financial results for the current fiscal year, Honda expects to record 1) operating expenses of 820 billion yen to 1.12 trillion yen and 2) a share of the loss of investments accounted for using the equity method of 110 billion yen to 150 billion yen. Moreover, Honda expects to record special losses of 340 billion to 570 billion yen in the non-consolidated financial results for the same fiscal year.
These amounts are preliminary estimates as of today (March 12, 2026), and should be finalized in the consolidated and non-consolidated financial results for the fiscal year ending March 31, 2026.
Furthermore, in the next fiscal year or later, additional expenses or losses may be incurred in connection with the above-mentioned reassessment of the automobile electrification strategy. Combined with the losses to be recorded in the current fiscal year, the total amount of losses is expected to be a maximum of 2.5 trillion yen. This amount is estimated based on information currently available to Honda, and as this estimate includes risks and uncertainties, the actual amount to be recorded may differ from this estimate.
In order to achieve more stable and continuous dividends, Honda adopted DOE (dividend on equity ratio) as its shareholder redistribution indicator; therefore, despite this revision to the consolidated financial results for the fiscal year ending March 31, 2026, Honda made no revision to the forecast for the dividend per share for this fiscal year.
