Honda Logo [AFP Yonhap News]

Japanese automaker Honda announced on the 12th that it forecasts a deficit of up to 690 billion yen (approximately 6.4 trillion won) in fiscal year 2025 (April 2025 - March 2026).

According to Kyodo News and the Nikkei, Honda has revised its net profit forecast for fiscal year 2025 downward from an initial surplus of 300 billion yen (approximately 2.8 trillion won) to a deficit of up to 990 billion yen (approximately 9.2 trillion won).

If Honda records a deficit, it would be the first time since its listing in 1957, according to the Asahi Shimbun.

The main factor behind Honda's large anticipated deficit is the re-evaluation of its electric vehicle (EV) strategy. Honda has decided to halt the development of three vehicle models planned for production in North America.

The company had planned to sell only electric vehicles and fuel cell vehicles (FCVs) from 2040, but decided to change its strategy as the adoption of EVs is slower than expected.

Honda President Toshihiro Mibe said at an online press conference on the same day that the previous plan to focus solely on EVs "is realistically difficult to achieve."

Honda stated that additional costs and losses may occur in fiscal year 2026 and beyond due to the strategy change. The estimated scale of losses, including the current fiscal year, is up to 2.5 trillion yen (approximately 23.2 trillion won).

Honda plans to strengthen hybrid vehicle sales instead of focusing solely on EVs in the future.

Honda executives, including President Mibe, have decided to partially return their salaries for fiscal year 2026 due to the deteriorating performance.