Honda is scrapping three electric vehicles that were headed for North American production, a decision that’ll trigger its first annual loss as a publicly traded company in nearly seven decades. The Japanese automaker confirmed Thursday it’s killing the Honda 0 SUV, Honda 0 Saloon, and Acura RSX, absorbing a financial blow that could hit 2.5 trillion yen, or roughly $15.7 billion, across this fiscal year and the next.
The move comes as the company gets squeezed from two directions at once. EV demand in the States has softened considerably, while in China it’s losing ground to domestic competitors like BYD that move faster and think differently about what modern car buyers want. Wall Street took notice, with shares tumbling nearly 6 percent in Tokyo trading on Friday.
The three EVs that won’t make it
The canceled models represent a significant retreat from Honda’s electric ambitions. Two of them, the SUV and Saloon, belonged to the company’s new 0 Series, while the third was slated to wear the Acura badge. All were deep in the pipeline for US manufacturing, but Honda concluded that pushing them into a slowing EV market would only dig a deeper hole.
That pullback carries real costs. The company now expects to take write-downs on the factory equipment tied to those models, plus additional charges for winding down their development. For the current fiscal year, Honda forecasts operating expenses between 820 billion yen and 1.12 trillion yen linked directly to the cancellations. A separate impairment on its struggling Chinese operations adds another 110 billion to 150 billion yen in losses from equity investments.
Why demand vanished and China got tough
Honda frames this as a response to ground shifting under its feet. In America, the anticipated EV boom lost momentum after policymakers eased fuel rules and pulled back on incentives. A market that looked like a sure bet a few years ago now looks like a gamble the company can’t justify.
The real trouble, though, might be China. Honda acknowledges it got outmaneuvered there by a wave of EV startups that prioritize software and driver assistance over traditional selling points like fuel economy or cabin space. Those newcomers move fast, and Honda couldn’t match their pace. Sales suffered, and now the company is writing down its joint ventures there.
What happens now at Honda
The company’s leadership isn’t escaping responsibility. The president and vice president will forfeit their short-term bonuses and take 30 percent pay cuts for three months. Other auto-division executives are taking 20 percent reductions.
Looking ahead, Honda plans to swing back toward hybrids, particularly in the US and India where demand remains strong. That doesn’t mean EVs are dead forever. The company intends to reintroduce them more gradually, waiting until the math on profitability and consumer appetite lines up. A fuller strategy lands in May, when Honda promises to lay out its revised roadmap. For now, the electric future arrives more slowly than planned.