Honda announced the cancellation of the Honda 0 SUV, the Honda 0 Saloon, and the Acura RSX crossover in North America, leaving only the Honda Prologue electric vehicle—developed in partnership with General Motors—as the sole EV in its U.S. lineup.
The company revised its fiscal‑year 2026 guidance to a net loss of ¥420 billion to ¥690 billion, with an operating loss projected at ¥270 billion to ¥570 billion. The cancellation triggers a write‑down of up to ¥2.5 trillion, the largest single‑year hit in Honda’s history and the first operating loss for a Japanese automaker in nearly seventy years.
Honda cited the expiration of U.S. federal tax credits for electric vehicles, President Trump’s tariffs, and intensified competition from Chinese EV makers as key drivers of the decision. The company also noted a broader slowdown in EV demand in the U.S., which made the projected sales volumes insufficient to cover the high development and production costs of the three models.
In response, Honda will concentrate on developing competitive hybrid vehicles and expanding its motorcycle business, which remains a core revenue source. The Prologue partnership with GM continues to provide a foothold in the U.S. EV market while the company reassesses its electrification strategy for 2030 and beyond.
The cancellation and loss guidance signal a significant shift in Honda’s business model. The write‑down and loss forecast underscore the financial impact of the EV strategy reassessment, while the motorcycle division’s stability offers a counterbalance to the automotive segment’s challenges.
"Honda 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," said a Honda spokesperson. "In light of the recent slowdown in the growth of the EV market in the U.S., Honda will reassess its resource allocations and further strengthen its hybrid models." "For Honda, motorcycle business is our founder's business, and will continue to be the company's core business," added the company’s president.
Morgan Stanley downgraded Honda to Equal Weight following the announcement, reflecting the market’s concern over the revised loss guidance and the company’s strategic pivot.
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