Stellantis and Ford are not the only manufacturers to pay dearly for the hasty and chaotic backtrack on electrifying their lineup. The Japanese Honda Motor Co. has also just announced the cancellation of several electric cars previously announced for the North American market: the SUV and sedan of the 0 Series and the Acura RSX.
HOW MUCH DOES HONDA’S BACKTRACK ON ELECTRIC COST
The need to deeply revise its industrial strategies combined with the increasingly pressing competition from nearby Chinese brands has pushed Honda to lower its forecasts for the fiscal year ending March 31, 2026. The company estimates operating costs and write-downs between 820 and 1,120 billion yen (5.5 – 7.5 billion dollars), in addition to losses from equity investments in China of another 110-150 billion yen.
THE BAROMETER FOR 2026 TURNS TO BAD WEATHER
Overall, Honda expects total costs related to this reorganization to reach 16.7 billion. The new outlook for the 2026 fiscal year now indicates a net loss attributable to shareholders between 420 and 690 billion yen, compared to the previously estimated profit of 300 billion by the Japanese company. Despite this change, the company has chosen to maintain previous dividend forecasts, supported by the profitability of the motorcycle and financial services sectors.
“In such a difficult competitive environment, Honda has not been able to offer products with a better quality-price ratio than that of new electric vehicle manufacturers, resulting in a decline in competitiveness,” the company commented, admitting that its car division “has found itself in an extremely difficult situation due to various factors, including the inability to respond flexibly to these changes in the operating environment, aggravated by the decline in profitability of gasoline and hybrid models” caused by the trade barriers erected at North American borders by Donald Trump.
HONDA TAKES REMEDIAL ACTION
Buffeted by US tariffs, by the White House’s new climate rules which have once again favored combustion engines and sidelined electric cars, Honda intends to reallocate resources to strengthen its hybrid (HEV) model lineup in Japan, the United States, and India in response to market volatility.
With a very Japanese move probably rooted in the sense of responsibility the Japanese call hansei, company executives have announced cuts to their compensation: president Toshihiro Mibe (pictured) and vice president Noriya Kaihara will forgo 30% of their monthly salary for three months and all bonuses related to the performance of the difficult year just ended.
