Honda operating profit plunges 61% as U.S. tariffs and EV slowdown hit results

Honda Motor (NYSE:HMC) reported on Tuesday, February 10, 2026, that its fiscal third-quarter operating profit tumbled 61.4% as the company navigates a perfect storm of U.S. trade tariffs and a costly pivot in its electric vehicle strategy.

Japan’s second-largest automaker posted operating profit of ¥153.4 billion ($987 million) for the quarter, missing the average analyst estimate of ¥174.5 billion as its core automotive business slipped into an operating loss for the nine-month period.

The sharp decline was driven by approximately ¥267.1 billion ($1.7 billion) in one-time impairment charges related to the cancellation of certain EV models and the writing down of development assets.

Management cited a significant cooling in the North American EV market and shifting U.S. regulatory policies—including the removal of consumer tax credits and the imposition of import tariffs—as primary catalysts for the strategic realignment.

These tariffs alone reduced operating profit by ¥289.8 billion over the first three quarters of the fiscal year.

Despite the bottom-line pressure, Honda maintained its consolidated revenue at $34.69 billion (¥5.34 trillion) for the quarter, supported by record sales in its motorcycle division and resilient demand for its gasoline-electric hybrid models in the United States.

Net income for the period was $997.2 million, or $0.76 per share.

Meanwhile, the company stood by its full-year operating profit forecast of ¥550 billion for the fiscal year ending March 2026, banking on a "hybrid-first" offensive to bridge the gap as it scales back its 2030 global EV sales target from 30% to 20%.