A trio of soon-to-launch EVs have been axed by Honda, as the Japanese brand prepares to take a multi-billion dollar write-off due to the late decision.
Overnight, Honda announced it was pulling 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 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,” the carmaker said.
In addition to this, Honda attributed the decline of the three upcoming North American EVs to a slump in profitability across its petrol (gasoline in some markets) and hybrid vehicles.
“Honda had been making steady progress in pursuit of EV adoption by leveraging its stable earnings base provided by existing gasoline and hybrid vehicle business based on technologies and know-how amassed through the development of hybrid models over many years, and motorcycle and financial services businesses with a solid customer base.
“However, the profitability of Honda automobile business is currently declining due primarily to 1) the unfavorable impact of changes in US tariff policies on the gasoline and hybrid vehicle business and 2) a decline in the competitiveness of Honda products in Asia due to the impact of the allocation of more resources to EV development.
“Honda automobile business has fallen into an extremely challenging earnings situation due to various factors, including its inability to respond flexibly to these changes in the business environment, compounded by a decline in the profitability of gasoline and hybrid models due to the impact of newly imposed tariffs.”
As a result, Honda said the “reassessment of the automobile electrification strategy” will end up costing it up to 2.5 trillion yen (A$22.2 billion), with the potential for operating losses between 270 billion (A$2.4 billion) and 570 billion yen (A$5.1 billion) for the financial year.
To get itself back on track, Honda said it’ll “reassess its resource allocations and further strengthen its hybrid models” in the US, “will enhance the model lineup and cost competitiveness in India”, and “strive to enhance its competitiveness by introducing next-generation hybrid models and reassessing the allocation of its resources” in Asia.
This week’s announcement comes after Nikkei Asia reported in July that a large electric SUV from Honda had been cancelled, though it appears now that could have been the 0 SUV.
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.
It’s unlikely these changes will impact Australia in the short term, as none of the 0 Series models were meant to come here, and Honda is only just about to launch its second EV in the local market.
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