Honda Motor Company (NYSE:HMC) announced a drastic retrenchment of its electrification strategy on Friday, canceling the development and production of three core electric vehicles slated for the North American market.
The decision marks a watershed moment for the Japanese automaker, which anticipates the reversal will result in a staggering 2.5 trillion yen (approximately $15.7 billion) in total costs, including write-offs and asset impairments.
The canceled models—the Honda 0 SUV, the Honda 0 Saloon, and the Acura RSX—were intended to be the pillars of Honda’s next-generation EV lineup.
However, management concluded that proceeding with the launches in the current market environment would likely deepen long-term financial losses.
The company cited a "slowdown" in the U.S. EV market driven by the rollback of federal incentives and the easing of emissions regulations, alongside stiff competition from software-defined domestic manufacturers in China.
The financial fallout is expected to push Honda into its first annual net loss since it went public nearly 70 years ago.