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Honda records first loss in 70 years of activity

2026-05-14 22:20:40Biznes SHKRUAR NGA REDAKSIA VOX
Honda

Japanese automotive giant Honda has recorded its first annual loss in 70 years, marking a critical moment for the global electric car industry.

As the BBC writes, the company reported an operating loss of 423 billion yen, or about $2.68 billion, for the financial year ending March 2026.

According to Honda, one of the main reasons for the crisis is the decline in demand for electric vehicles, which turned out to be much lower than expected. Faced with this situation, the company has decided to withdraw from some ambitious targets for the production of electric cars and to source parts from China, where costs are lower.

New policies in the US also contributed to the financial difficulties. The removal of tax incentives for electric vehicle buyers by the Donald Trump administration, as well as tariffs on imported cars and parts, hit the profits of major automakers hard.

Honda, which is considered the second largest automotive company in Japan, is facing major challenges in adapting to rapid changes in the global electric vehicle market.

Analysts estimate that traditional companies have difficulty reacting quickly to fluctuations in demand and strong competition from Chinese manufacturers.

As part of the new strategy, Honda will focus more on its motorcycle business, hybrid vehicles and financial services. The company has also suspended plans to build electric vehicle and battery factories in Canada.

Chief Executive Officer Toshihiro Mibe confirmed that Honda has abandoned its target of electric vehicles accounting for 20% of sales by 2030, as well as its plan to have its entire vehicle range be electric by 2040.

Market experts call this development a wake-up call for the global automotive industry.

According to financial analyst Danni Hewson, many traditional companies "bet" that consumers would quickly switch to electric cars, but economic reality, high living costs and competition from China have changed the course of the market.

However, rising fuel prices due to tensions in the Middle East have brought renewed interest in electric vehicles. Despite this, experts warn that the market will continue to face significant uncertainty and challenges in the coming years.


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