Honda has decided to cancel the development and market launch of three electric vehicle models that had been planned for production in North America.
Honda 0 SUV, Honda 0 Saloon and Acura RSX were all scheduled to enter production at the automaker’s EV hub in Ohio. The vehicles first rolled out as concept prototypes at CES 2025, where Honda touted them as “near-production designs.” But now, the company has determined that starting production and sales of these three models in the current business environment where the demand for EVs is declining significantly would likely result in further losses over the long term.
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In the near term, though, the losses will be huge. Honda is expecting to take a $15.7 billion hit. As Reuters points out, the charges will drive Honda to its first annual loss in the nearly 70 years it's spent as a listed company.
Honda has been leaning on the fairly stable earnings base provided by its gas and hybrid vehicle business to help with its transition toward a more carbon neutral strategy. But the company said its traditional vehicle business has been hurt by tariffs and declining product competitiveness in Asia.
Honda in part blamed its decision on declining demand for EVs in the U.S. amid the easing of fossil fuel regulations and revisions to EV tax incentives. It also said it was struggling to keep pace in China, where it said consumer demands have shifted away from hardware features, like fuel efficiency and cabin space, toward more flexible software-defined features.
The evolving EV market has negatively impacted other automakers like Stellantis, which took a $26 billion charge and sold its half of a billion-dollar EV battery factory for just $100. Still, industry analysts seemed surprised that things got so bad for Honda that it outright killed its EVs instead of just scaling back production.
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