The automotive sector’s significant shift away from electric vehicle (EV) blueprints has brought about yet another casualty: Honda, which recorded its first yearly losses since 1955.
Honda, alongside other global automakers, dialed back its EV ambitions after the Trump administration altered US emissions standards and eliminated the $7,500 tax credit available to American consumers. EV sales plummeted following the September expiration of the tax incentive, and even recent surges in gasoline prices failed to significantly boost US buyer interest in electric models.
Car manufacturers had anticipated far stricter emissions mandates in the US, prompting them to pour billions into transitioning their entire lineup to fully electric platforms over the coming decade. However, the Trump administration repealed the tougher emissions guidelines established by the Biden administration and removed substantial financial penalties that manufacturers faced for non-compliance.
These regulatory reversals compelled automakers to re-prioritize the sale of high-profit, large gasoline-powered trucks and SUVs. Nevertheless, this pivot has come at a high cost, forcing manufacturers to absorb major write-downs on their substantial EV investments.
For the fiscal year concluding in March, Honda reported that its earnings took a hit of 1.6 trillion yen, equivalent to nearly $10 billion, wiping out an anticipated profit of $7.4 billion for the year. Instead, the company posted a net deficit of 403.3 billion yen, or $2.6 billion.
Honda also indicated that further write-offs related to prior EV commitments are expected in the current fiscal year, although these are not projected to result in another net loss.
Honda’s financial showing follows similar moves by General Motors, which announced a $7.2 billion scaling back of its EV push in 2025. Meanwhile, rival Ford disclosed a $17.4 billion impairment charge for the year, and Stellantis—which sells Jeep, Ram, Dodge, and Chrysler in North America—reported an impact of 25.4 billion euros, or $29.7 billion.
GM managed to report a profit for the year despite absorbing these charges. However, the costs associated with curbing EV endeavors caused both Ford and Stellantis to register net losses for 2025. Ford anticipates additional expenses in the current year as well.
Despite these adjustments, manufacturers have not completely abandoned their electrification roadmaps. This commitment remains strong in Europe and Asia, and likely in certain US states led by California, which has regulations banning the sale of new gasoline cars by 2035—though Congress has taken steps to challenge that ban.
Automakers also express concern over escalating rivalry from Chinese manufacturers, who predominantly market electric vehicles. Chinese automakers currently maintain a comparatively modest presence in the US market.
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