Honda Reports First Annual Loss Since 1957 Amid EV Strategy Shift

Financial Loss and Restructuring

Honda Motor has reported its first annual loss since 1957. The company, Japan's second-largest carmaker, posted the loss on Thursday. The financial downturn is attributed to more than $9 billion in costs associated with restructuring its electric-vehicle (EV) business.

Reports indicate the company racked up a full-year loss of $2.7 billion in the last fiscal year. This loss marks the first time the company has seen such a deficit since it began selling cars in the early 1960s.

EV Strategy Reversal

The losses follow a period in which Honda pursued an aggressive transition toward electric vehicles, a strategy the company is now attempting to walk back. As part of this shift, Honda has embarked on a major overhaul of its EV strategy, with a particular focus on its core market in the United States.

As part of this reversal, Honda has scrapped previous EV sales goals. The company has also cancelled three planned electric vehicle models in the U.S.. These moves come as EV demand drops, placing Honda alongside other manufacturers such as GM and Stellantis in a broader industry reassessment of electric vehicle viability.

Market Reaction and Future Outlook

Despite the reporting of the first loss in nearly 70 years, Honda's share price spiked following the announcement. The rise followed more buoyant predictions and forecasts for the year 2026.

The company's current financial position reflects the high cost of its previous EV ambitions, including the $9 billion writedown used to restructure the business.