Honda Loses Billions In First Annual Loss Ever Thanks To EVs

Honda has had many successes since it was founded in 1948, but not everything Honda has made headlines for has been positive. Honda has seen some major car flops over the years, for one, but 2026 saw the company achieve an even less desirable milestone: its first annual loss. As reported by The New York Times, this is the first time Honda has found itself in the red since it became a publicly-traded company in 1957 — and it's no small chunk of change, either.

At the end of its fiscal year on March 31, Honda revealed that it had incurred a whopping $2.7 billion net loss, in addition to a near-$10 million hit to its earnings. Much of this is down to Honda's attempted foray into the electric vehicle market, which hasn't gone the way it hoped. Per Motor1, Toshihiro Mibe, Honda's current CEO, has stated that the automaker has given up its plans to go all-electric by 2040, with this retreat leading to the massive loss.

Speaking at a May 14 media conference, Mibe related how the EV landscape has shifted dramatically in the business and consumer arenas, and admitted that while Honda tried to react, it failed to do so quickly and effectively. Looking into how the EV market has changed reveals multiple factors that may have contributed to Honda's EV troubles and subsequent financial woes.

As hinted at by Toshihiro Mibe, Honda's historic financial loss is a result of multiple compounding factors. For one, the sales of Honda's EVs have declined sharply. The last quarter of 2025 reportedly saw Honda EV sales drop to around 15,000 units worldwide, with U.S. sales of the Honda Prologue — the EV JD Power named the least satisfying for 2026 — falling by 86%. Honda is not alone, of course; EV sales have dipped across the board, with even 2026's rising gas prices not helping to drive demand.

There's also the matter of regulations in the United States surrounding EVs. The Trump administration notably rolled back fuel and emissions regulations for gas-powered vehicles in February 2026, in addition to removing the $7,500 tax credit in 2025. The latter dampened customer demand for EVs, while the change in regulations encouraged automakers to scale back their EV development in favor of investing in gasoline vehicles. Honda, for its part, has shifted its focus to hybrid technology, hoping to unveil 15 new models by 2030.

CNN noted that Honda hinted an additional writedown on its EV investments could be on the horizon for the current fiscal year. However, this move is not expected to result in a further loss. The automaker insisted that it is not giving up on EVs, however, and intends to be ready to meet demand if it ever increases.