Honda's EV Reset
Honda CEO Apologizes for First Annual Loss Since 1957 Amid Costly EV Restructuring
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Key Points
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Mibe warned that pursuing the planned EV lineup would leave Honda's automotive business 'in the red' for at least five years, possibly seven.
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Some shareholders criticized management for the loss and said Mibe and other directors didn't seem regretful, with critics calling for clearer explanations.
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Honda cited a rollback of EV subsidies and a write-down, noting that U.S. market share for battery-powered cars was well below forecasts and that selling the planned models would have required large incentives.
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The automaker halted development of three EV models for production, underscoring the strategic shift away from an aggressive EV push.
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Proxy advisers Glass Lewis and ISS recommended supporting all directors, and Honda shareholders backed Mibe along with 10 other nominees.
Honda Motor posted its first annual net loss since listing on the stock market in 1957 — a staggering 423.9 billion yen ($2.7 billion) — and its CEO publicly apologized to shareholders at the company's 102nd general meeting in Tokyo on June 26 AP News. The loss came after Honda scrapped an aggressive electric vehicle push and took more than $9 billion in EV-related write-downs, capping a turbulent year defined by policy reversals, Chinese competition, and a painful strategic rethink.
CEO Toshihiro Mibe secured his own reappointment to the board, along with ten other directors, after pledging to return Honda's automotive business to profit within three years MarketScreener. Proxy advisers Glass Lewis and ISS both recommended supporting all nominees, giving Mibe crucial institutional cover.
Mibe Apologizes but Defends the Painful EV Retreat
Standing before shareholders, Mibe apologized for the "great concern and inconvenience" the loss caused. But he also made clear the alternative was worse. He warned that pushing ahead with Honda's original EV lineup would have kept the automotive division "in the red" for five to seven years nippon.com. "We had to act," he said, framing the retreat as survival — not failure.
Honda halted development of three EV models and indefinitely suspended an $11 billion EV and battery production project in Canada Car and Driver. The company also scrapped the Honda 0 Series SUV and Saloon and the Acura RSX project. In their place, Honda plans to launch 15 new hybrid models by 2029, repositioning hybrids as its "core profit driver" for the years ahead.
U.S. Policy Shifts and Chinese Rivals Triggered the Crisis
Honda pointed directly at Washington's rollback of EV subsidies as a key cause. The $7,500 consumer EV tax credit collapsed in 2025, gutting demand for battery-powered cars. A 15% tariff on imported auto parts squeezed margins further Washington Post. U.S. market share for battery-electric vehicles fell well below Honda's forecasts, and selling the planned models would have required massive discounts to move.
China compounded the pain. Honda's market share there fell from 8% to below 3% as rivals like BYD flooded the market with software-rich, competitively priced EVs Nation Thailand. Honda's hardware-first legacy left it flat-footed. Global vehicle sales dropped from 3.7 million to 3.4 million units in a single year, even as overall revenue edged up 0.5% to 21.8 trillion yen, propped up by record motorcycle sales in India and Brazil.
Shareholders Push Back, Calling the Board Insufficiently Regretful
Not everyone at the Tokyo meeting accepted Mibe's apology at face value. Some shareholders said the CEO and other directors did not look genuinely sorry given the scale of the loss nippon.com. Critics called management "rigid" and said Honda should have spotted the warning signs and pivoted earlier. One 30-year company veteran, Takuya Sato, campaigned publicly before the meeting for Mibe's dismissal, arguing the CEO should "take full responsibility."
Despite the anger, the vote went in management's favor. All 11 board nominees were approved. Honda also added a new director — Mahito Shikama, a former Honda R&D managing officer — with expertise in software-defined vehicles and autonomous driving Honda Global. The move signals Honda wants to compete on software and tech, not just hardware, going forward.
Honda Stock Rises as Investors Bet on the Hybrid Pivot
Despite the historic loss, Honda's stock edged up 1.48% after the meeting TipRanks. Investors appeared reassured by Mibe's blunt honesty and a clear plan back to profitability. Honda is forecasting a net profit of 260 billion yen for the current fiscal year. The company slashed planned EV investment to 800 billion yen while redirecting 4.4 trillion yen toward hybrid and gasoline technology over the next three years.
Analysts note the sharp contrast with Toyota, whose hybrid-first strategy now looks prescient. Honda's costly detour into aggressive electrification — and the nearly 70-year profit streak it broke — stands as a cautionary tale about betting too heavily on one technology too fast. The question now is whether the hybrid pivot can restore investor confidence before the next wave of EV competition arrives.
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