Japanese carmaker Honda has posted the first full financial year loss in the brand’s history since going public in 1957, leading it to abandon its ambitious future plans.
In the 2025-2026 Japanese financial year (April 2025 to March 2026), Honda posted an operating loss of 414.3 billion yen (A$3.63 billion), a significant change on its previous operating profit of 1.21 trillion yen (A$10.6 billion).
At the core of the losses were Honda’s EV-related cancellations, previously expected to cost up to 2.5 trillion yen (A$21.9 billion), though the true cost of 1.45 trillion yen (A$12.7 billion) still had a significant impact in the short term.
However, Honda expects that even though it’ll take a 500 billion yen (A$4.38 billion) hit this year on cancelling its EV plans, it could return to profitability by the end of the financial year to the tune of 500 billion, thanks in part to its successful motorcycles division.
In the long-term, Honda is now targeting hybrid vehicles to account for 2.5 million annual sales globally in 2030, an increase of its previous aim of 2.2 million. It’ll launch 15 new models in that time, with North America as a key focus market.
Crucially, the brand has also walked back its ambitious goals to not produce any engine-powered vehicles by 2040, announced by Toshihiro Mibe after he became its CEO in 2021.
Earlier this year, Honda pulled the plug on production versions of the 0 Series SUV and 0 Series Saloon , as well as the upcoming Acura RSX EV which was set to be based on the same platform.
The EVs were all set to be produced in North America and launch as early as 2027, however declining demand in the market resulted in Honda ripping the bandaid off early.
Honda had previously planned to launch seven EVs in the US from its upcoming 0 Series, though it last year said it was unlikely to meet its previous EV sales estimation of 30 per cent by 2030.
The carmaker previewed what it called its “next-generation large-size hybrid systems” in Japan last year, centred around a V6 engine which complies with “stringent environmental regulations”.
Mated to new-gen drive units and a freshly developed battery pack, Honda claims the new V6 hybrid powertrain is not only highly efficient but also low-cost to the carmaker.
According to Honda, the new V6 hybrid system could see its large vehicles be up to 30 per cent more fuel efficient than petrol-powered models in the same segment, and provide 10 per cent better acceleration performance – though it’s believed this isn’t a comparison to other hybrids.
A display of the new powertrain system appears to show the V6 engine will be fitted with an electric motor driving the front wheels (and likely a second motor which recoups energy through braking), while there will also be a rear electric motor for all-wheel drive models.
As a part of its financial briefing, Honda revealed a new ‘Hybrid Sedan Prototype’ – expected to influence the next-generation Accord – and an Acura Hybrid SUV Prototype, both of which are expected to launch by 2029.
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