After 70 years Honda marks her first annual loss

The demand for electric vehicles has not been as strong as the company predicted, with Honda which reported a total operating loss for the year that ended in March 2026 of the 423 billion yen (2.68 billion dollars: 1.99 billion pounds), reports BBC, broadcast Periscope.

The firm said it was giving up some of its automotive production targets and would supply parts from China, where prices are lower, to maintain low costs.

She cited changes in US policy as an increase in its losses, including the removal of tax incentives for American consumers who buy electric vehicles and set tariffs.

American consumers could previously receive up to $7,500 in tax loans if they bought a new electric vehicle, but it was removed from President Donald Trump in September 2025.

Its vehicle tariffs and imported auto parts in 2025 also damaged the profits of several large automotive producers, despite a reduction of tariffs from 25% to 15%.

Honda, first listed on the scholarship in 1957, has grown over the years into Japan's second - largest car company. Analysts said its size and inherited nature make it difficult to adapt quickly to fallings and rapid increases in demand for electric vehicles.

Honda said she would now focus on boosting her successful motorcycle business, its financial services, and the production of hybrid vehicles.

She mentioned North America, Japan and India as the top subx0-train for its future growth" - although she suspended her plans to build electric vehicles and batteries in Canada.

Executive Director Toshihiro Mibe said that Honda will give up its intentions for electric vehicles to make up one fifth of the sales of new cars by 2030.

He added that Honda is also giving up her goal that all its vehicles be electric by 2040.

The Honda expects 512 billion are electricity-related losses in the coming financial year, which ends in March 2027.

'A dark historical moment.'

The"is a dark historical moment for Honda, but not surprising,"said Danni Hewson, head of financial analysis at AJ Bell.

"Like many old automotive producers, she bet drivers make a quick switch towards electric vehicles - and lost as the world changed. "

She said politics, the cost of living and competition by Chinese companies forced Honda to give up the black plans of electric vehicles and"played costs".

Hewson added that even though demand for electric vehicles has increased in recent months due to increased gas costs from the US-Israel war with Iran, <x0-cympanies like Honda have to adapt immediately, which is difficult for businesses of this". /Periscope