By Kosaku Narioka
Honda Motor expects to book up to $15.7 billion in expenses and losses related to the reassessment of its electric-vehicle strategy, and expects to swing to an annual net loss as a result.
Expenses and losses related to the re-evaluation could total as much as 2.500 trillion yen for this fiscal year ending March 31 and in the coming years, the Japanese automaker said Thursday, after its global rivals gave gloomy outlooks in recent months.
Honda said that it has decided to cancel the launches and development of certain models in response to a slowdown in the North American EV market. The company also expects to record impairment losses on investments in China due to intensified competition.
The Japanese automaker's re-evaluation of its EV strategy comes after similar moves by rival carmakers to pull back from EVs, which many Americans are still reluctant to buy.
Jeep maker Stellantis said in February it would book charges of about $26 billion. Ford took a $19.5 billion hit in December, while General Motors in January reported a $6 billion charge.
Honda on Thursday projected a net loss of between Y420 billion and Y690 billion for this fiscal year, down from its previous net profit forecast of Y300 billion. It maintained its annual revenue forecast at Y21.100 trillion.
The Japanese company said some executives would give up a portion of their pay next fiscal year. Chief Executive Toshihiro Mibe will give up 30% of his monthly pay for three months, Honda said.
Honda said it aims to strengthen its hybrid electric vehicle models to improve its car business' profitability. It also plans to capitalize on solid earnings from its motorcycle and financial services businesses to maintain stable returns to shareholders.
Last month, the Japanese automaker reported a loss in its car business for the latest quarter ended December due to U.S. tariffs and EV-related impairments, despite profit growth in its motorcycle business.
Write to Kosaku Narioka at kosaku.narioka@wsj.com
(END) Dow Jones Newswires
03-12-26 0452ET
