By Battery Power Online Staff
March 16, 2026 | Honda Motor Co., Ltd. announced late last week that it is canceling the development and market launch of three electric vehicle models that had been planned for production in North America. The decision was made as part of the reassessment of the company’s automobile electrification strategy due to various factors including recent changes in the business environment.
The announcement comes after similar reevaluations by Ford and other auto OEMs.
Honda undertook a major strategic shift toward the popularization of EVs based on its belief that EVs will be the optimal solution to realize carbon neutrality especially for small-size mobility products, including passenger cars, and 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, the company said in a statement.
However, the profitability of Honda’s automobile business is currently declining, the company said, due “primarily to the unfavorable impact of changes in U.S. tariff policies on the gasoline and hybrid vehicle business and a decline in the competitiveness of Honda products in Asia due to the impact of the allocation of more resources to EV development.”
In addition, the automobile business environment surrounding Honda is undergoing significant changes, and the outlook remains uncertain, the company continued.
Previously, with stringent environmental regulations fully implemented in the U.S. and other countries, Honda pursued EV adoption with strong determination that striving for carbon neutrality is a responsibility Honda, as a manufacture of mobility products, must fulfill for the future. However, in the U.S., the expansion of the EV market has slowed down due to several factors including the easing of fossil fuel regulations and revisions to EV incentives.
Moreover, in China, what customers value more in automobiles is shifting from hardware features, such as fuel efficiency and cabin space, to software-based features that will continuously advance according to customer preferences. This has intensified the competition due to the rapid emergence of newer EV manufacturers that leverage their short product development cycles and strengths in software-defined vehicle (SDV) technologies, including advanced driver-assistance systems (ADAS). In such a difficult competitive environment, Honda was unable to deliver products that offer value for money better than that of newer EV manufacturers, resulting in a decline in competitiveness.
In order to improve the current earnings situation as early as possible, Honda will cancel the development and market launch of three EV models that had been planned for production in the U.S., namely the Honda 0 SUV, Honda 0 Saloon, and Acura RSX.
Honda now expects to record write-off and impairment losses on tangible and intangible assets that were intended to be used for the production of these three EV models, as well as losses related to additional expenses resulting from the cancellation of the development and sales of these models.
In addition, in consideration of the intensification of competition in China, Honda reassessed the recoverability of investments accounted for using the equity method in China, and now expects to incur an impairment loss on the investments accounted for using the equity method.
As a result, in the consolidated financial results for the current fiscal year, Honda expects to record operating expenses of 820 billion yen ($5.1 billion) to 1.12 trillion yen ($7.1 billion) and a share of the loss of investments accounted for using the equity method of 110 billion yen to 150 billion yen. Moreover, Honda expects to record special losses of 340 billion yen ($2.4 billion) to 570 billion yen ($3.5 billion) in the non-consolidated financial results for the same fiscal year.
